Qwest Drops out of Hunt for MCI

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.

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