Wednesday, February 23, 2005

Qwest Submits New Bid for MCI

Qwest Communications submitted a revised bid to acquire MCI for approximately $8 billion. The sweetened proposal adds collars to protect MCI shareholders should the price of Qwest's shares decline.

Qwest argues this revised proposal is superior to Verizon's bid because it delivers greater value in cash and stock per MCI share. Qwest estimates an "synergy value" of approximately $18 per MCI share in a combined Qwest/MCI company. Qwest also believes its proposal would face less regulatory scrutiny because of the significantly smaller footprint overlap (business, consumer and network) in a Qwest/MCI combination. This would lead to fewer and less extensive divestiture demands from regulatory agencies and will avoid the industry concentration and public policy issues the Verizon/MCI merger presents. Therefore, Qwest argues its proposal has a higher chance of being completed quickly.

In a statement, MCI's Board confirmed that it will conduct a thorough review of the Qwest offer.


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