MCI Accepts Verizon's Bid

If approved, the deal would end the bidding war between Verizon and Qwest Communications International for the Ashburn, Va.-based telecommunications company.

Verizon added about $900 million, plus additional shareholder protections, to its initial offer of $6.75 billion. Qwest on Monday gave MCI an April 5 deadline to respond to its latest bid of $8.45 billion or have the offer withdrawn.

"We respect the right of Verizon to change the composition and value of their bid, but we still believe our proposal creates superior value for shareowners," Denver-based Qwest said in a statement released Tuesday. "We are going to assess the situation and determine what is in the best interests of shareowners, customers and employees."

Qwest began the acquisition contest for MCI in early February with a bid of roughly $8 billion. But New York-based Verizon trumped that offer on Valentine's Day with a bid of more than $6.7 billion for MCI. The MCI board favored the proposal from Verizon, which many Wall Street analysts deemed the stronger suitor, but in mid-March Qwest sweetened its bid to almost $8.5 billion.

The Verizon/MCI deal would follow on the heels of a similar telecom megamerger by SBC Communications and AT&T.

Tyler Nelson, vice president of business development and marketing at Bridgewater Systems, a Roanoke, Va.-based VAR, said another big telecom union is a good thing.

"Telco consolidation for us has a positive impact," said Nelson, whose company specializes in converged telecommunications systems and intelligent IP networks. "As the carriers move to consolidate and bring access technologies together, it drives near-term demand for a more comprehensive approach to policy management across networks. That's good for providers like us."