According to the Denver Post, citing unnamed sources, Qwest CFO Oren Shaffer met last week with several MCI shareholders who want Qwest, which is prepared to pay more than Verizon, to launch a hostile bid for MCI.
In the same article, Qwest chief executive Richard Notebaert did not rule out continuing the campaign to take over MCI, which the company is believed to think is necessary to remain competitive in the consolidating US telecommunications market.
After a protracted bidding war, Qwest tabled an offer of $9.9bn, only to see MCI’s board of directors recommend shareholders accept an $8.5bn offer from Verizon, which is seen to be the more stable longer-term stable for the former WorldCom.
It is no longer in the best interests of shareowners, customers and employees to continue in a process that seems to be permanently skewed against Qwest, Qwest said last Monday, which was interpreted by most as an admission of defeat.
It is thought that Qwest, disgruntled with the MCI board’s treatment of its offers, to get back into the game if MCI shareholders can remove the current directors and replace them with a slate of directors more friendly to Qwest’s advances.
Qwest already claims its final bid is preferred by holders of more than 51% of MCI’s shares. Its $30 per share bid would have been partially financed by holders of about 13% of MCI stock. Verizon has arranged to buy over 13% of MCI from a single investor.
Regardless of whether Qwest continues to pursue MCI, the opportunities for mischief between now and the Verizon-MCI merger closing, which cannot happen until the companies receive shareholder and regulatory approvals, are ample.
Qwest has already complained to state and federal regulators that the proposed merger of AT&T and SBC Communications will be bad for competition and customers, and seems likely to do the same for Verizon-MCI.
