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  1. #1
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    Qwest raises bid to $9.9 bln not to be outdone by Verizon

    Qwest Raises MCI Offer to $30 a Share, or $9.75 Bln

    http://www.bloomberg.com/apps/news?p...top_world_news


    April 21 (Bloomberg) -- Qwest Communications International Inc., the No. 4 U.S. local-phone company, will raise its bid for MCI Inc. to $30 a share, or $9.75 billion, to derail MCI's agreement to be bought by Verizon Communications Inc.

    MCI shareholders would receive $16 a share in cash and $14 a share in stock, Denver-based Qwest said in a regulatory filing. Qwest also raised $800 million in extra financing from investors, contributing to the increase from $27.50 a share.

    Thoughts? Comments? What will this mean for current MCI customers and local loops and the overall Qwest network if Qwest gets MCI?

  2. #2
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    Oct 2004
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    Will never happen. Qwest's debt load is huge, and i cannot see how the can rationalize this amount of money and make the combined business profitable (let alone their own).

  3. #3
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    If Qwest couldn't afford the money at all, MCI would've already gone with Verizon. I don't think it's that open and shut.... I also don't think Qwest would be wasting their money on lawyer fees to prepare their bids for them if they weren't really interested in acquiring MCI. I'm sure there are stipulations in each bidders contracts which would probably safeguard the shareholders.

  4. Originally posted by varg
    If Qwest couldn't afford the money at all, MCI would've already gone with Verizon. I don't think it's that open and shut.... I also don't think Qwest would be wasting their money on lawyer fees to prepare their bids for them if they weren't really interested in acquiring MCI. I'm sure there are stipulations in each bidders contracts which would probably safeguard the shareholders.
    Qwest is desperate. It's far too small to continue to compete in the long run, especially considering its lack of a wireless service.

    It HAS managed to raise the funding to pay for MCI, there's no question of that. But their debt load is massive. If you look at the MCI deal, the amount they've offered is greater than the value of all of their assets (around $7.7B, I believe). By comparison, Verizon has about $100B in assets.

    From an MCI shareholder standpoint, going with Qwest is great because of the amount of cash offered. But in the long run (not something shareholders are typically paying much attention to), Qwest would have a hard time supporting MCI.
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  5. #5
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    What will this mean for current MCI customers and local loops and the overall Qwest network if Qwest gets MCI?
    The quality of the IP network will be improved -- both IP networks are in the top 10 and combining them will be great.

    Qwest has great pricing on local loops between LATAs in many areas, far cheaper then MCI However currently Qwest will not do local loops within a LATA in a lot of states, whereas MCI will. My guess is that restriction is due to state regulation, which may not change after a merger.

  6. #6
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    Apr 2001
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    Verizon will make out a winner either way at this point. 250Million breakup fee from MCI if they do take the Qwest bid, and another what ~215million profit from all the shares they purchased from MCIs largest holder(5$/share profit @43million shares).

  7. #7
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    Nov 2004
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    Originally posted by Dilhole
    Verizon will make out a winner either way at this point. 250Million breakup fee from MCI if they do take the Qwest bid, and another what ~215million profit from all the shares they purchased from MCIs largest holder(5$/share profit @43million shares).
    Seems Qwest is already working to bipass the MCI main office and is going directly after the major shareholders. I wonder if Qwest is making a bid at MCI so that they can just be bought out by someone like Verizon or SBC in the end.

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