Qwest chief executive Ed Mueller moved Wednesday to calm investor and employee concerns about the company’s proposed merger with CenturyTel, declaring that the deal “gives us more potential to invest” and creates few operational overlaps.
The remarks came at Qwest’s annual stockholders meeting in Denver, where investors approved a proposal that will allow owners of at least 10 percent of the company’s stock to call special meetings to discuss matters such as takeover offers.
“We’ll have more money to invest than before,” Mueller said in response to a question from a union representative. “The combined company will be even more aggressive in high-speed Internet.”
CenturyTel, which operates as CenturyLink, announced plans last month to buy Qwest for $22 billion in stock and assumed debt and move the combined company to Monroe, La.
The companies have said merging will save them $575 million in annual operating costs, spurring layoff fears.
“We are concerned that the synergies will come at the expense of our members’ jobs,” said Mary Taylor of the Communications Workers of America, which represents about 15,000 workers at Qwest.
Mueller said regarding “the men and women who serve our customers, there’s no overlap.”
“There are overlaps in corporate-overhead functions and things like that,” he said.
The combined company will serve about 17 million phone land lines in 37 states.
Mueller said merger documents were filed Monday with the Federal Communications Commission, starting the regulatory-approval process.
More than 100 investors attended the stockholders meeting, which could be Qwest’s last as a Denver-based company. The merger is expected to close by April.
Three of four shareholder proposals were defeated Wednesday. Shareholders voted 52 percent in favor of the measure allowing them to call special meetings.
“Right now, we might find a better merger candidate than CenturyTel,” said shareholder advocate Gerald Armstrong, who proposed the measure. “How can we call a special meeting? We can’t.”
The board of directors still has to consider the nonbinding measure and decide how it would be implemented. It’s unclear whether that will happen before shareholders are asked to vote on the merger, which CenturyTel said will likely be in August.
At least six shareholder lawsuits have been filed in U.S. District Court in Denver alleging that the deal doesn’t adequately compensate Qwest investors. They also claim that Qwest executives and board members breached their fiduciary duty by not negotiating a collar, which would have allowed Qwest to opt out if CenturyTel’s stock falls below a specified level. Such a provision was included in Qwest’s takeover of U S West in 2000.
Andy Vuong: 303-954-1209, avuong@denverpost.com or
