Verizon Fights Back In MCI Spin
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Verizon have launched an attack on the offer for MCI by Qwest. An additional blow, warns of Verizon walking away from the deal if MCI favour Qwest. Although Qwest at $8.93bn has offered more, the $7.6bn Verizon bid is promoted as financially secure and offering more upside. A letter from Verizon's CEO and Chairman Ivan Seidenberg lays it on the line. Qwest, he alleges, is seeking to acquire MCI, "to raid its [MCI's] balance sheet and use it as a financial lifeboat," This may allude to the fact that Qwest is the smallest of the 4 baby bell telecoms companies. The US industry is rapidly consolidating and Qwest may the weakest of the lot. Both of the bidders have indicated they are willing to walk. Qwest have put a deadline of midnight tonight for MCI to recommend their offer. A hostile takeover battle involving one or both might then ensue. Mr Seidenberg in his letter, remarked on the shareholders who are protesting at the MCI boards handling of the Qwest bid. He said "the decision making process is being driven by the interests of short-tem investors rather than the company's long-term strength and viability." Qwest, meanwhile has delivered signed financing commitments to MCI's board. Also a merger agreement which it was prepared to sign. In response MCI would only say it represented a "superior proposal".
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