Verizon chief executive Ivan Seidenberg on Wednesday shot down speculation that his company would try to acquire Qwest and MCI in a package deal.
“In Qwest’s case … even though we could afford it, the fact is, it’s a small company that serves very rural states for the most part and has a lot of debt,” Seidenberg told employees in a webcast’s transcript filed with regulators Wednesday.
Seidenberg went on to call Qwest “not a strong company” and a company that wouldn’t add a lot to Verizon’s business.
“So our focus is really – it’s on MCI,” he said in the webcast.
Denver-based Qwest and Verizon are locked in a bidding war for long-distance carrier MCI. On Saturday, MCI’s board called Qwest’s $30-a-share bid superior to Verizon’s $23.10-a-share offer.
But Ashburn, Va.-based MCI had already accepted Verizon’s merger proposal. If Verizon doesn’t respond to Qwest’s proposal by Friday, MCI could recommend that its shareholders go with Qwest’s offer. A shareholder vote on Verizon’s proposal will be held this summer.
Several analysts have suggested that one option for Verizon would be to let Qwest win MCI and then buy the combined company later.
Verizon is attracted to MCI’s long-distance and data networks, which would allow it to compete with a proposed AT&T and SBC combination for government and corporate contracts.
New York-based Verizon boasts a market value that is 15 times that of Qwest’s $6.4 billion market capitalization.
Seidenberg told employees that Verizon’s options include going forward with an MCI shareholder vote on its current bid, making a higher bid or walking away and taking a breakup fee.
Staff writer Aldo Svaldi can be reached at 303-820-1410 or asvaldi@denverpost.com.
