Verizon Ups Offer to Win MCI

31 March 2005

US telecoms giant Verizon Communications has won the rebidding contest for long distance phone carrier MCI. But the companies have been down this route before ...

Verizon has now sweetened its offer to MCI - formerly Worldcom before its fraud implosion last year - by nearly $1 billion (€774m, £553m) to $7.6bn, in a final effort to beat off rival Qwest Communications.

Qwest's latest offer stands at $8.45bn, but MCI's board has again decided to accept Verizon's long-term stability and the value of its stock over the contender's $17bn debt and uncertain business prospects.

The duel for MCI's affections has been going on for around six weeks [WAMN: 21-Feb-05] since it favored Verizon's first $6.75bn offer over Qwest's $8bn.

Despite the apparent end of negotiations, sources say Qwest ceo Richard Notabaert may still raise the stakes or take his case directly to shareholders, bypassing MCI's board. He could also challenge an MCI-Verizon union by appealing to antitrust regulators. His last, but least attractive option, is to accept defeat.

Data sourced from New York Times; additional content by WARC staff