RealTime IT News

Qwest Ups Bid For MCI

In a move certain to irritate Verizon executives and titilate MCI shareholders, Qwest has raised its bid for MCI by $800 million to $9.7 billion.

The cash and stock offer, which breaks down to $30 per share, is the latest in a battle between Qwest and Verizon for the Ashburn, Va., long-distance and network services provider.

"This revised offer provides an additional $2.50 per MCI share in value, an additional $1 billion in committed financing for the combined company," Qwest CEO Richard Notebaert said in a letter to MCI directors. "We are confident that this offer constitutes a superior proposal within the meaning of your amended merger agreement with Verizon."

MCI, which has demonstrated its preference for a Verizon merger, said in a statement that it will review the revised offer. Notebaert said the offer will be withdrawn if MCI doesn't agree that it is superior to Verizon's $7.6 billion bid by 5 p.m. EST tomorrow.

Verizon also weighed in.

"We continue to believe Verizon is the best partner for MCI," the New York regional carrier said. "As we move through the proxy process, we will continue to assess the situation and intend to take the necessary steps at the appropriate time to secure shareholder approval and complete our pending transaction."

Qwest and Verizon covet MCI because of its large IP data-service deals with government agencies and corporations. And with the pending merger of SBC and AT&T , neither wants to be left behind by the wave of industry consolidation.

The Baby Bells consider those long-term, high-margin contracts crucial to their future prosperity, as cable operators, VoIP upstarts and wireless carriers try to hone in on their traditional businesses.