MCI's board considers revised Qwest offer superior

IDG News Service - The ongoing tug of war between Verizon Communications Inc. and Qwest Communications International Inc. for ownership of MCI Inc. had new life breathed into it over the weekend when MCI's board concluded that a revised offer from Qwest is superior to a deal from Verizon that it had earlier accepted.
Qwest submitted the revised offer on Friday and gave MCI until 5 p.m. Eastern Saturday to consider it. The offer is worth $30 per MCI share and consists of $16 in cash and $14 in Qwest stock, which is substantially more than the deal accepted from Verizon in late March. That is worth $23.50 per share and consists of $8.75 in cash and $14.75 of Verizon stock for each MCI share.
Although MCI's board has decided that the Qwest offer is superior, it hasn't yet changed its recommendation to shareholders to accept the Verizon deal. Under the terms of the merger previously agreed on, Verizon has until Friday to submit a revised offer or let its current offer stand. MCI's board then has until May 3 to change or keep its current recommendation.
A termination of the deal with Verizon would come with a $240 million penalty to MCI, according to Verizon.
Qwest said in a statement that it was "gratified" with the decision of MCI's board.
Verizon said it believes that its deal represents the best short- and long-term deal for MCI shareholders and that it will "consider all of our options and determine how best to serve Verizon shareholders."
The fight for MCI began in mid-February when the carrier accepted an acquisition offer from Verizon worth $6.7 billion. Qwest has submitted counteroffers that have been turned down by MCI, but the competition did result in Verizon raising its offer to about $7.6 billion. The Qwest offer made on Friday was worth $9.9 billion.