Qwest soap opera continues

Revised bid or hostile takeover?

Qwest could be prepared to launch a hostile takeover for MCI after the company formerly known as WorldCom accepted a sweetened offer from preferred bidder Verizon. Then again, reports from the US also suggest that Qwest might be getting ready to increase its offer for MCI.

Either way, it seems Qwest is not going to give up on MCI without a fight.

It's emerged that Qwest has signed up The Altman Group - a proxy firm based in New York - that specialises in canvassing shareholders for potential takeovers. Taking that route, though, would be costly and could drag on for months.

At the same time, Qwest is also reportedly considering upping its offer for MCI.

This latest twist in the MCI/Verizon/Qwest soap opera comes after Verizon upped its bid for MCI to $7.6bn. Although an improvement on its already accepted $6.7bn offer, it's still well short of Qwest's $8.5bn bid.

Accepting Verizon's revised offer MCI's chairman Nicholas Katzenbach said: "MCI's Board has been closely and carefully evaluating all of the recent developments. We believe Verizon's substantial increase in its offer, the strength of its competitive position and the financial certainty at close make this offer compelling to our shareholders, customers and employees."

Responding to Verizon's revised offer Qwest said: "We respect the right of Verizon to change the composition and value of their bid, but we still believe our proposal creates superior value for shareowners. We are going to assess the situation and determine what is in the best interests of shareowners, customers and employees." ®

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