Qwest questions Verizon deal to buy Slim stake in MCI - update 2

04/12/05 - newratings.com

NEW YORK, April 12 (newratings.com) – Qwest Communications International Inc (Q) has reiterated that its takeover bid for MCI Inc (MCIP) is a superior proposal, while criticizing Verizon Communications’ agreement to purchase a 13.7% stake in MCI Inc (MCIP) from Carlos Slim, a Mexican telecom magnate and the largest shareholder in MCI.

Qwest said in a statement on Monday that Verizon has created two classes of MCI shareholders by its agreement to acquire Carlos Slim's stake in MCI. The statement added that the agreement between Verizon and Carlos Slim has called into question the opinion of MCI's board that Verizon's lower offer is superior and fair. Qwest said that it considers its offer for MCI a superior proposal for all shareholders in the latter company. Over the weekend, Verizon announced that it had reached an agreement to acquire Carlos Slim’s 13.7% stake in MCI for about $1.12 billion or $25.72 per share in cash. MCI has rejected three takeover bids from Qwest, including the latest offer of $27.50 per share in cash and stock, while accepting a $23.10 per share offer from Verizon. Verizon said that its transaction with Carlos Slim would close in the next few days, after which Verizon would become the largest individual shareholder in MCI. Qwest said that it appears that MCI's board supports a two-tiered offer from Verizon that prioritizes the interests of one shareholder over those of others.