March 17, 2005 — (WEB HOST INDUSTRY REVIEW) — Qwest Communications (qwest.com) has submitted another bid to MCI (mci.com), sweetening its offer to $8.45 billion, according to reports.
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The most recent offer tops the reported $8 billion Qwest put on the table two weeks ago and is nearly $2 billion higher than the $6.7 billion Verizon (verizon.com) offered in its successful bid.
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MCI, which has been looking to sell for several months, elected to take the Verizon offer over a previous Qwest bid due to the company’s stronger financial position and potential for growth. But just over a week after MCI announced it was accepting Verizon’s bid, Qwest tabled a revised offer, believed to be approximately $8 billion.
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Qwest’s rather surprising move was made, reports say, because of the company’s concern that it would have difficulty remaining independent as the telecom industry continues to consolidate. Reports also indicated that MCI shareholders were unhappy with the Verizon bid.
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Earlier this month Verizon agreed to allow MCI to continue discussions with Qwest until March 17.
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Analysts speculate that Verizon will let Qwest buy MCI and then try to purchase the newly merged entity at a later date. However, other analysts believe MCI will continue to ignore Qwest’s overtures, wary of public perception given Qwest’s shaky financial position.
