MCI has rejected the latest takeover bid from Qwest
, citing “uncertainties” surrounding the Denver regional
carrier’s $8.9 billion offer.
Instead, the Ashburn, Va., long-distance and network services provider
remains committed to Verizon’s $7.6 billion merger plan.
Questions about Qwest’s synergy estimates, ability to close the deal and
Long-term financial prospects were among the reasons for shunning the
higher bid, MCI said.
“In the face of these risks, MCI was not willing to jeopardize the certainty
of its Verizon agreement for the uncertainties surrounding the Qwest
proposal,” the company said.
Qwest, which has heaped scathing criticism on MCI directors in recent weeks,
hinted that it may take its case to MCI shareholders.
“We are confident that our offer is superior, and statements of support from
many MCI shareowners indicate that they are in agreement with us,” Qwest
said in a statement. “Qwest will allow shareholders to dictate the next
steps.”
Several MCI stakeholders were unhappy with MCI directors’ reluctance to
consider previous offers from Qwest. Carlos Slim, MCI’s largest shareholder
with a nearly 14 percent ownership stake, reportedly said both Verizon offers, as well as Qwest’s earlier bid, were too low.
Denver-based Qwest also reportedly hired The Altman Group, a New York proxy
consulting firm, which could help it launch a takeover attempt.
“They have put in place everything they need to try a hostile takeover,”
Clifford R. Holliday, president of telecom consulting firm B & C Consulting
Services, told internetnews.com. “Would one succeed here? I am not
sure, but one certainly does hear a lot about the dissatisfaction of major
stockholders of MCI.”
With a wave of consolidation sweeping the telecom industry, Qwest may feel
that its options are limited if it doesn’t succeed in winning the MCI
sweepstakes, Holliday said.
