Regional Bell company plans to try again to acquire long-distance company and spoil the deal between Verizon and MCI.
Qwest Communications International Inc. isn't giving up on its plan to acquire telecom service provider MCI, even though the long-distance carrier has agreed to be acquired by Verizon Communications.
In a letter sent to MCI's board Thursday and filed with the Securities and Exchange Commission, Qwest chairman and CEO Richard Notebaert chastised MCI for turning down his offer, which was valued at around $8 billion, and accepting a lower offer from Verizon valued at around $6.75 billion. He indicated that Qwest planned to submit another bid.
The Verizon bid "is substantially less than the consideration Qwest offered to MCI shareholders," he wrote. He also said a deal between Qwest and MCI "is superior to the Verizon proposal because our regulatory approval process is likely to be completed at least six months more quickly." He also claimed that a deal with Qwest would produce more "synergies" than a deal with Verizon.
Notebaert seemed annoyed that "to date, we have not received any response from MCI or its advisors on the terms of our February 11 proposal." He also complained that Qwest got "substantially less" access to MCI's financial records to conduct due diligence than "other parties."
Qwest intends "to submit a modified offer to acquire MCI, and we would expect MCI and its advisors to engage us in a meaningful dialog regarding the merits of our offer," he wrote.
MCI chose to be acquired by Verizon, even though it offered less money, because Verizon was financially stronger than Qwest and provided better long-term prospects for growth in a rapidly consolidating telecommunications industry, industry analysts say. The Verizon-MCI combination also would have the depth of services to compete with the powerhouse company that's being formed by SBC Communications Inc.'s acquisition of MCI's rival, AT&T.
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