There was no word from Verizon this afternoon about whether
it will continue its bidding war with Qwest for MCI
.
MCI’s board of directors last weekend finally deemed
Qwest’s $9.7 billion cash and stock proposal superior to Verizon’s earlier
$7.6 billion plan — something that was obvious to many MCI shareholders.
The Ashburn, Va., long-distance and enterprise network services provider
gave Verizon until midnight tonight to revise its earlier bid, and most
industry watchers expect it to do so.
If New York-based Verizon does up its offer, it’s possible that it doesn’t
have to reach $9.7 billion to succeed. MCI officials have long preferred to
merge with Verizon, noting that the carrier has less debt than Qwest.
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, Voice over IP
businesses.
Regardless of the buyer, a merger between Qwest and one of its bidders will
likely take at least a year to win the necessary regulatory approvals.
