Ashburn, Va. – MCI Inc.’s chief executive told employees today that the long-distance phone company remains open to further merger talks with Denver-based Qwest Communications International Inc., despite its decision to stick with a lower-priced buyout from Verizon Communications Inc.
“MCI has the right to engage in further discussions with Qwest and remains open to the possibility of further discussions. We should have a better idea of their next steps in the near future,” CEO Michael Capellas said in a communication filed with the Securities and Exchange Commission.
Capellas said MCI accepted a sweetened $7.5 billion deal with Verizon because it provides more certainty to the company than an $8.9 billion bid from Qwest, a financially and strategically weaker company.
Investors appear convinced the bidding will continue, however.
Shares of MCI rose again today, moving closer to the $27.50 per share Qwest has offered and even further above from the $23.10 in cash and stock Verizon has agreed to pay. The stock rose 24 cents, or nearly 1 percent, to $25.65 on the Nasdaq Stock Market.
Capellas urged employees to stay focused on their work during the drawn-out merger negotiations.
“You may hear various claims, rumors or speculation in the media or from other sources,” Capellas wrote. “Let’s not get ahead of ourselves or distracted.”
MCI’s board voted late Tuesday to reject Qwest’s most recent cash-and-stock offer, a decision made after Qwest apparently rejected an MCI request to increase its bid to $30.
Verizon and Qwest, two of the nation’s biggest local phone companies, have been battling for about two months over Virginia-based MCI. Formerly known as WorldCom, MCI operates a national fiber-optic network serving a lucrative roster of government and corporate clients.
Based in New York, Verizon is the dominant phone company in the eastern part of the country. Denver serves 14 mostly Western states.
Shares of Qwest rose 2 cents to $3.80 today on the New York Stock Exchange, while Verizon fell 10 cents to $35.41 on the NYSE.
