Qwest Communications International Inc. on Monday said it was dropping out of the bidding war with Verizon Communications Inc. to acquire MCI Inc. after MCI declared a lower bid by Verizon to be superior.
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 in a statement.
A combination of Verizon and MCI would bring together the largest local phone company with the No. 2 long-distance carrier while leaving Qwest and BellSouth Corp. as the two remaining regional Bells without a role in a wave of consolidation.
Verizon first announced plans to acquire MCI in mid-February for $6.7 billion in cash and stock, two weeks after SBC Communications Inc. disclosed a $16 billion agreement to purchase AT&T Corp. The Associated Press reports that Verizons current bid is worth at least $8.5 billion in cash and stock, which is still well below the $9.85 billion bid Qwest had offered.
From the standpoint of risk versus reward, Verizons revised offer presents MCI with a stronger, superior choice, said Nicholas Katzenbach, MCI Board Chairman, in a statement.