Qwest Communications International is expected to submit a revised offer for MCI in the near future, despite being rebuffed twice in its...
DENVER — Qwest Communications International is expected to submit a revised offer for MCI in the near future, despite being rebuffed twice in its bid to snatch the long-distance carrier away from Verizon Communications, a source said yesterday.
Whether the offer takes the form of a new bid or a hostile takeover has not been decided, the source close to Qwest said on condition of anonymity.
Qwest’s board met yesterday, a day after MCI accepted a $7.64 billion acquisition offer from Verizon — about $800 million less than the most recent Qwest bid.
“The board was supportive of the company continuing its pursuit of MCI,” the source said.
Most Read Stories
- Family of girl snatched by sea lion lambasted for ‘reckless behavior’ WATCH
- Seahawks’ Michael Bennett does great things, but why the immaturity?
- What drivers can and cannot do under Washington state's new distracted-driving law
- Student’s pregnancy tests a Christian school’s values
- Startling video shows sea lion snatching girl from pier in Richmond, B.C. WATCH
MCI spokesman Peter Lucht declined to comment. Qwest spokesman Steve Hammack declined comment on the board meeting.
“We have heard from a number of our shareholders,” he said in an e-mailed statement. “We continue to weigh all options.”
Qwest hired The Altman Group, a proxy consulting firm, several weeks ago to supplement the investor-relations staff members. President Ken Altman and Hammack declined to discuss the specifics of the contract.
For a second day, investors apparently welcomed the possibility of a renewed Qwest offer as MCI’s shares traded near their 52-week high and above the $23.10-per-share value of the Verizon offer.
MCI rose 67 cents to $24.45, while Verizon advanced 57 cents to $35.43. Qwest shares dropped 2 cents, or 0.5 percent, to $3.77.
Qwest has in reserve about $960 million in letters of commitment from banks, Janco Partners analyst Donna Jaegers said.
The Denver-based company — with local phone service in Washington and 13 other Western states and a nationwide fiber-optic network — could increase its offer $1 to $1.50 a share and take it directly to shareholders, she said.
Terms of the deal reached Tuesday call for Verizon to pay $1 billion more for MCI than it offered last month. It values MCI’s shares at $23.10 each, excluding a 40-cent dividend paid to MCI shareholders this month.
Qwest’s offer values MCI at $25.60 a share. Both offers include dividends MCI plans to pay before either deal would be completed.
Board members for Ashburn, Va.-based MCI have said they were worried about a merger with Qwest because it is smaller and financially weaker than New York-based Verizon, the dominant local phone company in the Northeast and Mid-Atlantic and a leader in the cellphone industry.
Qwest has $17 billion in debt, lacks a wireless division and faces growing competition from cable and high-speed data companies.
Qwest has sweetened its offer for MCI twice, raising the bid by $500 million.