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Qwest to MCI: Decide by April 5

A crucial moment in the Qwest/MCI/Verizon saga passed at midnight when Verizon Communications Inc.'s (NYSE: VZ) deadline to allow talks between MCI Inc. (Nasdaq: MCIP) and Qwest Communications International Inc. (NYSE: Q) expired, with the MCI board having failed to respond to Qwest’s $8.45 billion offer (see Verizon Agrees to MCI/Qwest Talks).

Meanwhile, The Wall Street Journal reported this morning that Verizon has raised its cash-and-stock offer for MCI to $23.50 a share. That's $900 million higher than Verizon's last bid, but it's still below Qwest's latest offer.

Verizon had agreed to let MCI continue its talks with Qwest up until March 28. Yesterday, Qwest issued its own deadline, saying it will give MCI until April 5 to make up its mind, and if MCI doesn't take the Qwest deal at that time, the offer will be withdrawn.

"Since both of us recognize the importance of reaching a decision promptly, we think it is reasonable to inform you that if we have not executed an agreement on or before midnight, April 5, 2005, our offer will be withdrawn,” wrote Qwest chairman and CEO Richard C. Notebaert in a letter to the MCI board that was filed with the SEC yesterday.

The letter also contains some positive reinforcement. Apparently in response to the MCI board’s concerns over Qwest’s considerable debt, Qwest moved quickly over the weekend to secure from its lenders an additional $500 million in credit. It now has a credit line of $5.75 billion to help finance the deal, the letter says.

MCI is expected to either reject Qwest’s offer outright or decide that the offer and the last two weeks’ discussions might reasonably lead to a deal, and request another round of talks.

In early February, Qwest and Verizon started competing for MCI, with Qwest reported to have offered as much as $6.3 billion (see Qwest Wants MCI, Says Report). But Verizon entered the bidding and won the initial stage of the competition, publicly announcing a deal for $6.8 billion on February 14 (see Verizon Wins Tussle for MCI).

Qwest evenutally increased its bid to $8.45 billion (see Qwest Ups MCI Bid to $8.45B). MCI’s board recognized its fiduciary responsibility to consider the offer, and Verizon consented to new Qwest/MCI talks (see Qwest Ain't Too Proud to Beg).

On March 23, Verizon agreed to let MCI continue discussions with Qwest through March 28. Now that the deadline has expired, all eyes are on MCI to choose one of its two suitors.

— Mark Sullivan, Reporter, Light Reading

minnecool 12/5/2012 | 3:21:19 AM
re: Qwest to MCI: Decide by April 5 This absurd dance must end. Qwest must get on with the business of its survival. Clean up the shareholder lawsuits, unfiled "secret agreement" liabilities, and restructure the debt. Then...

Hold the auction
cyber_techy 12/5/2012 | 3:21:18 AM
re: Qwest to MCI: Decide by April 5 MCI has acceptad a sweetened $7.64B offer from VERizon
armchairgeneral 12/5/2012 | 3:21:17 AM
re: Qwest to MCI: Decide by April 5 Does Verizon have a stated plan for what it intends to do with the largest world-wide IP network there is? Now that a local US carrier has snapped up MCI, do they have plans to go global or do you think there will be a big sell-off of the network? Some data and thoughts along these lines here:

http://www.zero-sum.net/mci.ht...

AG.
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