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Last Updated: Monday, 2 May, 2005, 21:25 GMT 22:25 UK
Verizon sees off Qwest in MCI war
Verizon head offices in Manhattan, New York
Verizon is back in front again despite bidding less money
Qwest has pulled out of its chase for MCI, claiming the bidding war with Verizon had been tilted against it.

On Monday MCI accepted a revised $8.5bn (4.48bn) offer from Verizon and rejected a higher bid from Qwest.

Verizon's new bid won the support of MCI's board, which backed its latest offer as "superior", despite being below Qwest's existing $9.75bn pitch.

MCI directors said its large business customers might defect if it had accepted Qwest's offer.

"Additionally, as their contracts come up for renewal, a number of customers have also requested rights to terminate their arrangements with MCI in the event of a Qwest transaction," MCI said.

'Skewed against Qwest'

Last week, Qwest said shareholders owning more than half of MCI's stock preferred its proposal over Verizon's terms.

"It is no longer in the best interests of shareowners, customers and employees to continue in a process that seems to be permanently skewed against Qwest," the company said in a statement on Monday.

"Unfortunately, the latest in a string of decisions reconfirms what we have believed all along: that MCI never intended to negotiate in good faith with Qwest nor maximise shareowner value."

MCI's board had argued all along that Verizon was a better partner because it is bigger and has less debt.

Worldcom ruins

Verizon, the largest US telecommunications company, will gain control of the second-biggest player in the US long distance market.

MCI emerged from the ruins of bankrupt Worldcom last year.

Verizon's Monday offer is worth "at least $26 a share", according to a statement from MCI's board. Verizon's previous bid was worth $23.10 a share.

MCI shareholders will get $5.60 a share in cash and either a guaranteed minimum of $20.40 in cash or 0.57 Verizon shares for every MCI share they hold.

Last week, Verizon made clear that any move by MCI to abandon their merger plan could trigger a demand for a $240m break-up fee.




SEE ALSO:
MCI warms to Qwest in bid battle
25 Apr 05 |  Business
Qwest raises its offer for MCI
22 Apr 05 |  Business
MCI rejects $9.1bn bid from Qwest
06 Apr 05 |  Business
Verizon threatens to end MCI deal
04 Apr 05 |  Business
MCI reopens bid talks with Qwest
01 Apr 05 |  Business
MCI accepts larger Verizon offer
29 Mar 05 |  Business


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