MCI pressured to favour Verizon over Qwest
by Brian Turner
After declaring an April 21 revised merger bid from Qwest Communications superior, MCI on Monday reversed course and said that pressure from business customers was making it more likely that it would declare a revised offer from Verizon superior.
Verizon‘s new offer was $26 per share, made up of $5.60 cash and either 0.5743 Verizon shares for each MCI share or $20.40 in value, whichever is greater.
This offer totals $8.45 billion in comparison to a $9.9 billion bid from Qwest, which amounts to $30 per share - $16 in case and 3.373 Qwest shares at a $14 fixed value.
In making Monday’s announcement, MCI listed a number of factors it is taking into consideration in evaluating the two bids.
It also said that some of its “most important business customers” have indicated a preference for Verizon over Qwest and that some had indicated they would wish to end their MCI contracts if the Qwest deal were accepted.
Qwest, meanwhile, claims that a survey it conducted shows that a majority of MCI shareholders prefer their bid over Verizon’s.
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