Qwest's Bid For MCI May Go Higher

MCI has endorsed Verizon Communications' lower offer than Qwest's $8 billion bid, because MCI believes Verizon represents a better fit for its services.

Omega Advisors Inc., a hedge fund that controls some three percent of MCI stock, is supporting a higher takeout price for MCI, according to press reports over the weekend. Verizon has offered $6.75 billion in cash and stock for MCI, and Qwest has indicated that it will counter with a bid even higher than its initial $8 billion offer. Both MCI--formerly called WorldCom--and Qwest have been racked with accounting scandals in recent months. Some observers favor Verizon's bid for MCI, because Verizon's financials are better than Qwest's.

The Wall Street Journal reported Monday that Qwest would modify its bid for MCI only if MCI would be willing "to engage in a discussion with Qwest."

In a letter to Qwest Chief Executive Richard C. Notebaert, a GSA official said: "I am satisfied that Qwest has taken adequate remedial measures, including significant changes in the company's management, the implementation of an ethics program, and continuous disclosure to the government regarding new issues that Qwest may face."

Sponsored post