Qwest continues MCI quest
- By Michael Hardy
- Feb 24, 2005
Although MCI officials have tentatively accepted an acquisition offer from Verizon, Qwest Communications International officials are not giving up. The company has renewed its offer to acquire MCI, revising the terms to make it more palatable to shareholders.
The total value of the deal remains the same, at about $8 billion. However, MCI shareholders would get most of their money when the deal is approved, said Claire Mylott, Qwest spokeswoman. The original offer delayed most of the payout to the closing of the transaction.
Qwest also added a "collar" to the offer, which protects MCI shareholders against the possibility of a decline in Qwest's stock value. The collar means that if the company's stock value should decline before the acquisition is complete, officials will adjust the exchange ratios to ensure that MCI stockholders get the value Qwest promised.
Qwest shareholders would own 60 percent and MCI owners 40 percent of the new combined companies, according to Qwest's new proposal.
In his letter outlining the new offer, Qwest's chief executive officer, Richard Notebaert, said that Qwest and MCI would blend better than MCI and Verizon.
"A Qwest/MCI merger would create an exciting and important new telecommunications company, of which MCI would become a meaningful part," he wrote. "The merger of Qwest and MCI would create a company with a strong market position, demonstrated commitment to superior customer service and innovative products and services, and the potential for significant value creation through cost synergies."
The combination would result in a combined company that would be a leader in [IP] technology, he added, with "the most advanced IP-based network and compelling suite of IP based services."
MCI officials said in a statement that they have received and will consider Qwest's revised offer.