Qwest Communications’ fifth offer to purchase long-distance giant MCI may finally be enough to get the matter before shareholders.
MCI yesterday said it would reopen talks with the regional bell company, just 24 hours after Qwest served up a sweetened $9 billion offer.
MCI had rejected four previous Qwest offers and the long-distance company’s board this week reiterated its desire to merge with Verizon even though its latest bid – $7.6 billion – is well below rival Qwest’s.
The board has steadfastly clung to the Verizon offer, saying its stronger balance sheet provided MCI shareholders with a better chance of seeing their shares increase.
But Qwest’s fifth bid attacked that stance head on. It increased the cash portion of its offer by $2, to $13.50, and included a so-called collar that will allow MCI shareholders to participate in 100 percent of any potential increase above $4.15.
The total Qwest offer is for $27.50 a share.
The latest twist in the two-month battle for the No. 2 long-distance company may now push the issue away from the board to shareholders.
“Ultimately, this is going to be decided by shareholders,” Steve Cohen, a fund manager with Kellner DiLeo Cohen & Co., said. Cohen owns MCI shares.
Verizon, which has already boosted its bid to $23.50 a share, can either increase the bid again or, under terms of its agreement with MCI, push the matter before shareholders.
Bids for MCI – TIMELINE ON telephone cord:
March 31: Qwest offers $8.94B.
March 17: Qwest offers $8.45B.
Feb. 24: Qwest offers $8B.
Feb. 14: Verizon offers $6.75B.
Feb. 13: Qwest offers $7.3B.
Feb. 10: Verizon informally offers $6.3B.
Feb. 3: Qwest offers $6.3B.