Qwest Raises Bid, Chides MCI Board
Qwest raised its offer from its previous bid of $8.45 billion entered March 17 (see Qwest Ups MCI Bid to $8.45B).
The new bid was contained in a terse letter from Qwest Communications CEO Richard C. Notebaert to MCI chairman Nicholas Katzenbach. The letter chided the MCI board for not giving Denver-based Qwest a chance to answer Verizon Communications Inc.'s (NYSE: VZ) latest $7.6 billion bid and accused it of holding private dialogues with Verizon representatives (see And the Winner Is... Verizon!).
“We were particularly dismayed that MCI did not contact us to discuss our willingness to adjust our offer prior to signing the Amended Merger Agreement, a step MCI deliberately chose not to take even though it certainly could have benefited MCI shareholders,” Notebaert writes.
Notebaert also asserts that when Verizon raised its offer March 29, it did so with good reason: “Verizon's amended offer was clearly in response to a finding by the MCI Board that the Qwest bid constituted a Superior Proposal.”
The confrontational tone of the letter appears to indicate that Qwest is ready to take the merger to a hostile proxy battle. The raised bid comes a day after Qwest announced it had retained a third-party firm to gauge the feeling of MCI shareholders on the announced merger with Verizon (see Qwest Won't Qwit on MCI).
Qwest filed the letter with the U.S. Securities and Exchange Commission (SEC), along with a detailed breakdown of the new offer’s terms.
Qwest stock was down 18 cents at $3.59 in mid-afternoon trading, while Verizon stock was trading up 11 cents at $35.54.
— Mark Sullivan, Reporter, Light Reading