MCI Spurns Qwest Again
Qwest's latest rejection came in the early hours of Wednesday morning, and follows previous knockbacks from the MCI board, which believes it has a more secure future in the arms of Verizon Communications Inc. (NYSE: VZ). (See And the Winner Is... Verizon! and Qwest to MCI: 'Pretty Please?'.)
MCI says the "Qwest proposal in its current form, taken as a whole, is not superior to [MCI's] merger agreement with Verizon," which is worth a total $7.6 billion (see Qwest Raises Bid, Chides MCI Board). Verizon, which has offered the equivalent of $23.50 for each MCI share, had threatened to withdraw its bid if MCI had recognized Qwest's offer, worth $27.50 per MCI share, as superior (see Verizon to MCI: Choose Us or Lose Us).
But it's not as if MCI dismissed Qwest as a potentially suitable partner. In its statement rejecting the Qwest bid, MCI says its board "reached out to Qwest seeking improvements on financial terms, certainty of close and other merger terms. Qwest immediately rejected virtually all of MCI's requests and reaffirmed that its latest proposal is its current best proposal."
While no further details were given, a Reuters report, citing an anonymous source, stated that MCI was looking for a $30 per share offer worth a total $9.9 billion.
So is that the end of the saga? Don't bet on it. MCI says it "remains open to the possibility of further discussions," while Qwest says it "is currently weighing its options, and shareholders will dictate the next steps in this process." (See Qwest Responds to MCI.)
That step could be a hostile bid.
MCI's share price ended Tuesday at $25.01, down just 7 cents. Verizon inched up 12 cents to close at $35.77, while Qwest's stock ended the day at $3.86, up 4 cents.
— Ray Le Maistre, International News Editor, Light Reading