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Qwest to submit revised bid for MCI

DENVER-Following on a government filing last week, regional telecommunications provider Qwest Communications International Inc. is reportedly set to submit a revised bid for MCI Inc. that will include a greater percentage of cash than what was included in the initial $8 billion offer. Qwest’s revised bid, which reportedly also includes stock price guarantees, is in response to MCI accepting a lower $6.6 billion offer from Verizon Communications Inc. that was favored due to Verizon’s stronger financial position.

Qwest’s original offer included 3.375 shares and $7.50 in cash for each MCI share.

While analysts have generally favored Verizon’s smaller bid, some MCI shareholders have asked the company to reconsider Qwest’s offer citing the greater compensation and possibility of more influence on the merged entity than if Verizon acquires MCI.

“While Verizon is a larger and more stable company than Qwest, such must be weighed against the fact that through a transaction with Qwest current MCI shareholders would participate much more meaningfully in the value created by having the MCI assets under a new corporate umbrella,” explained Elliot Associates L.P., which currently controls approximately 2.72 million MCI common shares, in a note sent earlier this week to MCI’s board of directors.

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