Qwest may continue pursuit of MCI
Hiring of proxy firm seen as sign fight's not over
DENVER -- Qwest has hired a proxy consulting firm, a clear sign it may bypass MCI's board and ask the long-distance phone company's shareholders to vote on Qwest's $8.45 billion offer as an alternative to MCI's new merger agreement with Verizon.
The Altman Group was hired to augment investor relations for Qwest Communications International Inc., the firm's president, Ken Altman, said yesterday. He declined to discuss details.
Investors responded favorably again to the prospect of Qwest persisting with its bid, pushing MCI's shares even further above the $7.64 billion price tag Verizon Communications Inc. agreed to pay on Tuesday.
The Qwest board was scheduled to meet yesterday to ''consider its options in the continued pursuit of MCI," a source said late Tuesday on condition of anonymity. A company spokesman did not return messages seeking comment.
The new deal with Verizon will cost $1 billion more than that company originally agreed to pay in mid-February, but is still worth $800 million less than the most recent Qwest bid.
Denver-based Qwest, with local phone service in 14 Western states and a nationwide fiber-optic network, may still submit a sweetened offer to MCI's board or perhaps try a hostile takeover, several analysts said Tuesday.
Qwest has declined to comment on its plans, but chief financial officer Oren Shaffer provided some hints of what's to come. Speaking at an investors conference before MCI's decision was announced, Shaffer said Qwest would consult with MCI stockholders if its bid was rejected.
Shares of MCI rose 35 cents to close at $24.13.
The new Verizon deal values MCI's shares at $23.10 each, not including a 40 cent dividend paid to MCI shareholders this month. Qwest's offer values MCI at $25.60 per share. Both offers include dividends MCI plans to pay before either deal would be completed.
Verizon's shares rose 57 cents to close at $35.43. Qwest fell 2 cents to close at $3.77.
MCI's board has been concerned about partnering with Qwest, which is financially weaker than Verizon. Qwest is weighed down by $17 billion in debt.
