In a revised $8 billion bid to acquire MCI Inc., Qwest Communications International Inc. on Thursday said a deal would be subject to less scrutiny from regulators than if Verizon Communications Inc. acquires the long-distance phone giant formerly known as WorldCom.
Qwest is confident that the significantly smaller footprint overlap in a Qwest/MCI combination will lead to fewer and less extensive divestiture demands from regulatory agencies and will avoid the industry concentration and public policy issues the Verizon/MCI merger presents, Qwest Chairman and CEO Richard Notebaert said in a letter to MCI Chairman Nicholas Katzenbach.
Qwests revised offer would protect MCI shareholders against falling share prices and shareholders would get more cash before the agreement closes than under the previous plan, Bloomberg reported.
The Los Angeles Times said Qwest changed some of the terms of its cash-and-stock offer to give MCI shareholders more cash sooner, and some guarantees against fluctuations in the stock price; but the mix of cash and stock, as well as the overall price, remained the same as the first bid, according to the paper.
Verizon, the biggest U.S. phone company, announced plans last week to acquire MCI in a deal valued at $6.75 billion. MCI, which emerged last year from the largest bankruptcy in U.S. history, rejected an offer by Qwest for about $8 billion.
New York-based Verizon has a market value of $98.3 billion, while Denver-based Qwest has a market value of $7.6 billion.
Their bidding battle for MCI comes amid a wave of consolidation, which the telecom industry has not seen in several years.