Qwest to bid again for MCI
MCI looks set to become the centre of a bidding war after Qwest said it planned to resubmit a bid for the US long distance telco.
In a letter to MCI's board of directors, Qwest chief executive Richard Notebaert said the company was currently poring over MCI's $6.7bn (£3.55bn) deal with Verizon announced on Monday.
"We would like to advise you that once we have completed our review of the Verizon merger agreement, we do intend to submit a modified offer to acquire MCI and we would expect MCI and its advisors to engage us in meaningful dialog regarding the merits of our offer and we would further expect access to due diligence information consistent with that offered other parties," wrote Notebaert
Indeed, the tone of the letter suggests that things could get nasty. Qwest is not happy that its "superior" offer of $8bn (£4.23bn) was rejected by MCI even though Verizon was only prepared to stump up $6.7bn.
"The consideration to MCI shareholders in the Verizon proposal is substantially less than the consideration Qwest offered to MCI shareholders," wrote Notebaert.
"In addition to the superior merger consideration offered by Qwest to your shareholders compared to the Verizon offer, we would like to remind you that Qwest's proposal is superior to the Verizon proposal because our regulatory approval process is likely to be completed at least six months more quickly and the value to the MCI shareholders from participation in approximately 40 percent of the synergies in a Qwest transaction will substantially exceed the value of synergies that would be received by MCI shareholders in a Verizon deal."
Three institutional investors, representing 10.5 per cent of MCI shares, have already said they believe MCI should reconsider the higher offer from Qwest and would welcome a renewed bid from Qwest. ®