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Verizon: MCI can talk to Qwest
Phone service provider says its deal will still win out, but grants two-week window for more talks.
March 2, 2005: 8:46 AM EST

NEW YORK (CNN/Money) - Verizon Communications gave the OK Wednesday for its betrothed, MCI, to date rival suitor Qwest Communications, at least for the next two weeks. But Verizon said it expects it'll still be the one going to the altar.

Verizon (Research), which signed an agreement to acquire MCI (Research) Feb. 14, said MCI and Qwest (Research) can hold the talks about a revised Qwest bid for MCI, and that such talks will conform with provisions of the Verizon-MCI merger agreement.

"Verizon recognizes that it is in the best interests of the stakeholders of both Verizon and MCI to address recent market speculation regarding Qwest's claims that it can deliver greater value to MCI's shareholders," the statement from Verizon said. "Notwithstanding this speculation, we believe that this process will result in MCI reaching the same conclusion that it reached after seven months of discussions with Qwest."

Verizon offered cash and stock in a deal valued at $6.75 billion, which is less than the $8 billion in stock and cash being offered by Qwest.

Some MCI shareholders objected to the company accepting the Verizon deal, which essentially paid no premium from the value of the MCI stock the day before the deal was announced. But advocates of the Verizon bid have said that the stronger financial position of Verizon make that offer worth more in the long run.

Qwest modified its offer for MCI last week, providing protection against a drop in its stock price and a faster cash payout in an effort to answer concerns about its bid. MCI Chairman Nicholas Katzenbach released a letter Tuesday that he sent to Qwest, saying the company would consider the new offer.

"The MCI Board will respond in due course after conducting a thorough review of Qwest's revised proposal, as it has with all previous proposals," said the letter. "I am hopeful that this letter will clear up any misconceptions and reassure you that the latest proposal from Qwest will receive the same extensive review as all previous proposals."  Top of page

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