Qwest weighs renewal of $8 billion bid for MCI

Verizon's lower offer was accepted last week

February 22, 2005|By NEW YORK TIMES NEWS SERVICE

Qwest Communications International Inc. spent the weekend weighing several proposals to make an another $8 billion bid for MCI Inc. executives close to the company said yesterday.

Qwest, which lost an auction for MCI to Verizon Communications Inc. last week despite making a higher offer, is hoping to break up that deal and get a seat at the negotiating table.

MCI is under increasing pressure from some shareholders to reconsider its decision to accept Verizon's $6.75 billion cash and stock bid over Qwest's $8 billion offer.

Several shareholders have sued MCI, contending that it failed to fulfill its fiduciary duty by not fully considering Qwest's offer and "by depriving MCI's public stockholders of maximum value to which they are entitled."

Qwest, which said last week that it intended to submit a new bid, has been meeting with MCI shareholders as it considers how to formulate an offer. People who have been briefed on merger talks said no offer from Qwest is expected in the next couple days while the company watches the shareholder lawsuits unfold.

MCI had privately said that it felt uncomfortable with Qwest's cash and stock bid because of the company's financial instability.

Qwest is considering how to develop a bid that includes protections for MCI shareholders against a sudden drop in Qwest's stock price. The company has ruled out an $8 billion all-cash bid, the executives said, because MCI's management had earlier dismissed the idea.

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