MCI Auction: Qwest Cedes Battle to Verizon

03 May 2005

The raging three month bidding battle between Verizon and Qwest for the hand of MCI - the telco known as Worldcom prior to its fraud implosion last year - is finally over.

The beginning of the end came last week when Verizon upped its $23.10 per share offer to $26, or $8.44 billion (€6.56bn; £4.45bn), setting Monday as the deadline by which the offer would be withdrawn if unaccepted.

Although the offer remains well below the $30 per share slapped on the table by Qwest, the MCI board opted for the safer harbor of Verizon's solid balance sheet.

Qwest ceo Richard C Notebaert, bowed to the inevitable last night, deciding the company could not continue to raise its offers.

It is rumored many MCI shareholders have erected small shrines in their bathrooms to Notebaert , commemorating their gratitude for his persistence that drove-up by 25% Verizon's initial $6.75bn agreed offer.

But the deal won't be done and dusted until approved by MCI stockholders (virtually a foregone conclusion), plus state and federal regulators, whose nod cannot be taken for granted in the light of widespread concern that consolidation could lead to higher call rates.

Meantime, Qwest is thought likely to join forces with consumer groups to fight the Verizon-MCI deal on antitrust grounds amid the overcrowded battlefields of Washington DC.

Data sourced from Wall Street Journal Online; additional content by WARC staff