Qwest says it will submit new bid for MCI
Copyright 2005 Ventura County Star
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Ventura County Star (California)
February 18, 2005 Friday
From Lexis Nexis
Denver (AP) — Qwest Communications International Inc. said Thursday it will submit another bid for MCI Inc., four days after the long-distance company agreed to be acquired by Verizon Communications Inc. in a $6.7 billion cash and stock deal.
Qwest Chairman and CEO Dick Notebaert told the MCI board of directors by letter that Qwest would make a modified offer and hoped that it would lead to new discussions.
The letter was contained in a Securities and Exchange Commission filing Thursday, and a Qwest spokesman declined immediate comment.
The letter was sent one day after Qwest released terms of its failed bid for MCI, saying that the total effective value was about $8 billion, including $1.60 a share in dividends, which was more than $1 billion above Verizon's offer.
Denver-based Qwest offered $23 a share to MCI stockholders, consisting of $7.50 a share in cash and $15.50 of Qwest common stock, based on a fixed exchange ratio of 3.735 Qwest shares per MCI share.
Analysts said Verizon, the dominant local phone company in the Northeast and a top cellular player, likely won MCI's favor because it is larger and in better financial shape than Qwest, the local phone carrier in 14 Western and Midwestern states.
Qwest is weighed down by more than $17 billion in debt, the lack of a wireless division and competition from cable and high-speed data companies.
Qwest shares closed down 13 cents, or 3.3 percent, at $3.84 a share on the New York Stock Exchange.
The filing was made after the markets closed. In after-hours trading, the shares jumped 11 cents, or 3 percent.
MCI shares, which finished the regular session down 21 cents at $20.66 on the Nasdaq Stock Market, rose 84 cents, or 4 percent.
Verizon shares rose 26 cents after hours, having finished down 44 cents at $35.68 on the NYSE.