MCI Dumps Verizon For Qwest
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Verizon has finally been dumped by MCI in favour of Qwest. The smallest baby bell's $30 offer finally won over the board. MCI had until Saturday afternoon to make up their minds about Qwest. The offer at $30 or $9.75bn had been declared "Best and final". MCI made the following announcement, "MCI, Inc. today announced that its Board of Directors has determined that Qwest Communications International Inc.'s latest offer to acquire the Company is superior to the terms of the current MCI/Verizon merger agreement." Until Qwest upped the price, MCI had been wedded to the lower Verizon offer. Qwest, although paying more was seen to be the strategically weaker of the two bidders. Qwest, however gloated, ""Qwest is gratified that MCI has recognized its superior offer for MCI. Through this combination, both the fundamental economics and the future competitive landscape of the telecommunications industry can be aligned to deliver long-term value for investors, robust competition and better services for customers." They further gushed "We expect MCI to build upon its declaration of superiority with specific acts of support, including expeditiously seeking regulatory approvals of a transaction that it considers superior and in the best interests of its shareowners." How long MCI sticks to its new allegiances is likely to depend on Verizon. Three options are available to Verizon, walk away with $240m in break-up fees, up its own offer or go to a shareholder vote. Verizon, is itself a major shareholder in MCI, having increased its share position to a 20%, following a deal with Mexican billionaire Carlos Slim.
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