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MCI holds firm on antitakeover plan

Telecom hints it won't try to aid Verizon bid

MCI Inc. said yesterday it won't amend a ''poison pill" provision limiting the ability of investors to accumulate more than 15 percent of its stock, a statement that followed Verizon's surprise weekend purchase of a 13.4 percent stake in the long-distance company.

The disclosure came amid speculation MCI might try to help Verizon Communications Inc., its preferred merger partner, end a bidding war with Qwest Communications International Inc. by clearing the way for Verizon to acquire more stock from major MCI shareholders.

The MCI statement said its board ''has no intention of amending its Rights Agreement to permit accumulations of the company's stock in excess of the current 15 percent limit."

The so-called poison pill provision is designed to let existing MCI investors buy new shares of stock very cheaply in the event of a hostile bid, thereby making the acquisition much more expensive for the would-be acquirer.

Verizon agreed Saturday to acquire a 13.4 percent stake from MCI's single largest shareholder in a $1.1 billion deal that values MCI's stock 11 percent higher than what Verizon is slated to pay MCI's remaining shareholders under its $7.5 billion merger deal with MCI.

The transaction with Mexican telecom magnate Carlos Helu Slim removed a major wild card in Verizon's bid to fend off an $8.9 billion offer for MCI by Denver-based Qwest.

While a decision to raise the 15 percent cap might enable Verizon to keep other blocs of MCI shares out of Qwest's hands, it could backfire by allowing Qwest to buy out short-term investors it contends favor its higher offer for MCI.

New York-based Verizon declined to comment. Qwest reiterated its weekend criticism of the Verizon-Slim deal, which it said created two classes of MCI shareholders and called into question the MCI board's previous judgment in accepting the Verizon deal.

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