March 14, 2005 — (WEB HOST INDUSTRY REVIEW) — According to reports, Qwest Communications (qwest.com) will sweeten its offer to acquire MCI (mci.com) to $8 billion, a move that could force Verizon (verizon.com) to raise its own bid.
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In February Verizon successfully bid for MCI in a deal believed to be worth $6.7 billion. MCI reportedly took the Verizon offer over Qwest’s original proposals, because of the company’s stronger financial position and potential for growth.
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Just over a week after the deal was reached, Qwest tabled a revised offer. 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 say that Verizon will likely make a counter-offer to Qwest’s bid, though it would not likely involve itself in a bidding war. Other analysts speculate that Verizion will let Qwest buy MCI and then try to purchase the newly merged entity at a later date.
