MCI Rejects Verizon for Qwest's Superior Bid

26 April 2005

US telecoms giant Verizon has been unceremoniously dumped by the object of its ardour, MCI, in favor of persistent suitor Qwest Communications.

The two month courtship of long distance phone carrier MCI - aka Worldcom before its fraud implosion last year - has seen Qwest's higher offers spurned for the greater financial security promised by Verizon.

But MCI finally succumbed to Qwest's "superior" $9.75 billion (€7.46bn, £5.09bn) charms on Saturday (April 23).

It now remains to be seen whether Verizon will again raise its proposal or walk away from the deal clutching a $240 million break-up fee and $10m in expenses from MCI. It has until the end of the week to respond.

Verizon owns a 13.4% stake in MCI thanks to a deal it made with erstwhile investor, Mexican billionaire Carlos Slim Helu. If it does decide to ditch the takeover, it could sell the shares to Qwest and pocket $186m in profits.

Data sourced from Financial Times Online; additional content by WARC staff