Qwest Digs In for MCI Battle

25 February 2005

The tug-of-war for control of US long distance phone carrier MCI appears to be moving in the direction of Qwest Communications.

The latter is expected to submit a revised $8 billion (€6bn, £4.1bn) bid today (Friday) for MCI, which only last week accepted a $6.7bn offer from America's largest telecoms firm, Verizon Communications.

Shares in MCI - known as Worldcom before its fraud implosion last year - have risen above Verizon's offer valuation, a pointer that Wall Street expects a successful Qwest.

Says Elliott Associates, one of MCI's top shareholders. "We feel the board erred in its decision with respect to the proposed merger."

Qwest has been cleared by the US government to bid for federal contracts but it will have to pay Verizon a $200m deal-break fee if it succeeds in taking over MCI.

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