Qwest met its St. Patrick's Day deadline and raised its bid for MCI nearly
$500 million, increasing the value of the acquisition to $26 per share,
according to a Securities & Exchange Commission (SEC) filing by the
company Thursday.
According to a statement by MCI, the company said it has received and
is currently reviewing the revised merger offer, and will respond to
the offer by March 28.
News Scan: April 5, 2005 - Forbes.com::
telephone company declare a rival $8.9 billion offer from Qwest as superior. before a deadline set by Qwest Communications International for MCI to accept or
http://www.forbes.com/business/2005/04/05/0405autonewsscan01.html?feed=rss_peopleHOME |
Richard Notebaert, Qwest chairman and CEO, vowed
Wednesday to prove to the industry it was committed to an MCI
takeover, and the cash bump reinforces the company has placed a
priority on the acquisition.
Investors Business Daily: Breaking News::
Qwest Communications International is expected to increase its acquisition offer MCI and Qwest are working against a March 17 deadline set for talks on a
http://www.investors.com/breakingnews.asp?journalid=26434866HOME |
Verizon has already entered an agreement
with MCI to merge for $6.7 billion. A minority bloc of short-term MCI
investors was angered by the deal, as the value of the agreement was
$1.3 billion less than Qwest's bid of $8 billion. Verizon agreed to
let MCI continue talks with Qwest, with a deadline on a new bid set
for today.
Deseret News | Verizon threatens to walk out on MCI::
If the MCI board, capitulating to Qwests artificial deadline, declares this bid Qwests offer is worth $27.50 in cash and stock, nearly 20 percent
http://deseretnews.com/article/1,5143,600123659,00.htmlHOME |
In a letter attached to the SEC filing, Notebaert noted the
increased value of the proposition to Nicholas Katzenbach, MCI
chairman, and reminded him of the benefits the new bid brings to
shareholders.
"Because the only change in our previous proposal is the significant
increase in the value of our offer, we are hopeful that you can
conclude your deliberations on our proposal quickly," the letter
stated. "As each day passes, MCI stockholders are denied the ability
to realize the benefits of the superior transaction we have proposed."
Robert Saunders, director of research at the Eastern Management Group,
said the increase of cash will sow division between MCI's short- and
long-term shareholders; the short-term investors want the cash Qwest
is willing to pay, while long-term investors are backing Verizon's
stronger financials.
The latest cash bid will strengthen the position of those short-term
investors, Saunders said, and force Verizon to make some kind of
counter-offer to show that it, too, is committed to MCI.
"This won't end up being a bidding war, where's its tit-for-tat," he
said. "I just think what MCI's long-term investors are going to be
looking for is some kind of commitment from Verizon that shows they
are serious about the deal, because the way the industry has looked at
this is that this is a must-have for Qwest and a nice-to-have for
Verizon.
"The long-term investors need a little backfill from Verizon at this
point saying, 'yes, Verizon is committed to this merger,'" he added.
For the time being, however, Verizon plans on sticking with its
original offer. In a statement released Thursday, officials said the
increased cash from the latest Qwest bid does nothing to address the
fundamental concerns of the company's financial strength. On
Wednesday, Ivan Seidenberg, Verizon CEO, went on the offensive
Wednesday, saying Qwest had exaggerated the extent of the synergies
possible through a combined Qwest-MCI merger.
"Qwest's most recent bid does nothing to address the fundamental
concerns we have identified, while increasing the amount of cash to be
paid out to shareholders exacerbates the risks," the statement read.
"We believe our agreed-upon transaction represents a fair and
sustainable value proposition for MCI's stakeholders, including the
company's long-term investors, its customers, its employees, and its
creditors.
"We trust that the MCI board of directors will continue to
do what is right for these stakeholders, and we look forward to
continuing to work with MCI to complete our exciting and mutually
beneficial transaction."
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