DENVER – The boards of directors of U S West and Frontier Corp. both authorized their companies’ management and advisers to enter into discussions with Qwest Communications International Inc.
U S West and Frontier each had agreed to be acquired by Global Crossing Ltd. when Qwest made unsolicited bids for the companies last month. Both U S West and Frontier decided not to take action on Qwest’s original offers after Qwest’s stock fell sharply, weakening its bid.
Qwest later upped its bid for the two companies and added collars to the offers that would protect U S West and Frontier against potential volatility of Qwest’s stock.
Frontier said it has notified Global Crossing of its plans to enter discussions with Qwest, while U S West has received permission from Global Crossing to do so.
Qwest is offering to buy Frontier for $68 per share in cash and stock, and U S West for $69 per share in stock. Global Crossing offered $63 per share for U S West and $62 per share for Frontier.
Global Crossing would receive more than $1 billion in break-up fees if both Frontier and U S West were to accept Qwest’s proposals.
