MCI agreed to reopen takeover talks with Qwest Communications after the fourth largest Baby Bell telecommunications group raised its cash and paper bid to $8.93 billion (€6.92 billion) - topping an improved offer from Verizon by 17.5 per cent.
MCI said it was reopening talks with Qwest after receiving a waiver from Verizon, which signed a revised merger agreement with the MCI this week after raising its cash and paper offer to $7.6 billion.
The battle for control of MCI, the second largest US long-distance carrier, began six weeks ago when MCI accepted an initial offer from Verizon.
Both Verizon and Qwest believe the acquisition of MCI would help accelerate their push into the advanced business communications market. Qwest, however, believes a deal would result in substantially larger synergies than Verizon is projecting and has raised its offer for MCI four times.
Despite this, MCI's board led by Michael Capellas, chief executive, has consistently favoured Verizon over Qwest, in part because of Verizon's stronger balance sheet and financial muscle. But Richard Noteaert, Qwest's chief executive, has refused to accept defeat.
In an effort to counter MCI's concerns, Qwest's latest offer includes extended protection for MCI shareholders should Qwest's stock fall before a deal is closed but would allow shareholders to benefit should Qwest's share rise. - (Financial Times Service)
