Qwest said yesterday that a survey it commissioned shows majority shareholder support of its $8.9 billion bid for long-distance carrier...
DENVER — Qwest said yesterday that a survey it commissioned shows majority shareholder support of its $8.9 billion bid for long-distance carrier MCI over a lower offer from Verizon.
The announcement came as Qwest neared securing $2 billion in financing for an MCI deal, according to a source familiar with the situation.
Qwest said a telephone poll conducted this week by its proxy consulting firm, The Altman Group of New York, showed shareholders who own more than half of MCI’s outstanding stock think Qwest’s bid is superior to the $7.5 billion Verizon offer accepted by MCI last week.
An Altman Group representative declined to comment, and Qwest did not release any other information about the survey, including the names of the shareholders who participated.
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MCI spokesman Peter Lucht said the company would review the survey and its methodology before commenting.
Verizon spokesman Peter Thonis also would not discuss the survey. “With a signed agreement and the support of MCI, we intend to work closely with MCI shareholders to get this transaction approved,” he said.
Qwest executives must decide whether to pursue MCI, which has repeatedly rebuffed its acquisition proposals citing concerns about Qwest’s finances. Qwest could submit a new bid or take its case directly to shareholders through a tender offer or proxy fight.
Qwest is close to raising about $2 billion in equity financing from large long-term investors, including some MCI shareholders, to help finance an MCI acquisition, a source familiar with Qwest’s actions said on condition of anonymity.
The investors would contribute at least $200 million each in exchange for shares in the merged company if Qwest acquires MCI, the source said. The third-party financing plan was outlined in the offer Qwest put on the table last week.
New York-based Verizon and Qwest, two of the nation’s biggest telephone companies, have been battling for two months to win MCI and its fiber-optic network with a lucrative roster of government and corporate clients. MCI’s board has twice accepted lower bids from Verizon.
Qwest’s most recent offer of cash and stock was worth $27.50 a share. Verizon’s latest stock-and-cash bid values MCI at $23.10 per share, up from $20.75 under the original agreement in mid-February.
The MCI board voted Tuesday to reject Qwest’s most recent offer, a decision made after Qwest apparently rejected an MCI request to increase its offer to $30 a share from $27.50.
In opting to stick with the Verizon offer, the MCI board reiterated its concern about Qwest’s financial health — it has $17 billion in debt — and the long-term value of the shares it would use as partial payment to MCI shareholders.
MCI has said it remains open to renewed merger talks with Qwest.
In trading yesterday, MCI shares rose 21 cents to close at $25.84, while Qwest shares advanced 13 cents, or 3.4 percent, to finish at $3.93 and Verizon’s stock declined 34 cents to end the session at $35.07.