Qwest to counter Verizon and bid again for MCI

Qwest vowed to fight for MCI and will make a counteroffer to Verizon's deal to acquire MCI, which was announced earlier this week.

Qwest Communications International officials said Thursday that the company would renew its bid for MCI, after rival Verizon Communications succeeded in nailing down an agreement earlier in the week to acquire MCI in a deal valued at US$6.7 billion.

Verizon and MCI announced their deal Monday, ending weeks of speculation about a likely agreement. But officials at Qwest, which had also been wooing MCI, Thursday indicated that the takeover saga may not be over.

"We will review Verizon's merger agreement with MCI and submit a modified offer," said Steve Hammack, director of corporate communications at Qwest, based in Denver. "We think it's the right thing to do for shareholders."

MCI officials were not immediately available to comment.

Qwest had earlier offered MCI US$23 per share, Hammack confirmed. That offer was rejected by MCI in favor of Verizon's bid.

Jockeying among the telecommunications companies was spurred by the January 31 announcement that SBC Communications plans to acquire AT&T in a deal worth US$16 billion. That deal will create the largest carrier in the U.S. Speculation about further industry consolidation has been rife since the announcement.

After the SBC-AT&T agreement was announced, the big question was what MCI, Qwest, Verizon and BellSouth would do in order to fight the newly merged telecom giant.

Qwest, while still losing money, earlier this week released an earnings report that showed it has started to successfully manage costs and narrow its losses.

On Tuesday, Qwest said that in the fourth quarter ended December 31, 2004, its loss per share was US$0.08 compared with a loss per share of US$0.23 one year earlier. Net loss was US$139 million compared to US$407 million one year earlier, while revenue decreased to US$3.44 billion from US$3.50 billion. Part of the decrease was due to weakness in local calling revenue, the company said. The company, however, said it reduced costs and that DSL (digital subscriber line ) subscribers had exceeded the 1 million mark.

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