Qwest Communications International Inc. yesterday took its case to acquire MCI Inc. to the Ashburn-based company's shareholders.
Qwest chief executive Richard C. Notebaert said its $8 billion bid is superior to the one from Verizon Communications Inc. that MCI's board of directors has accepted.
Qwest Communications International chief executive Richard C. Notebaert after yesterday's meeting with analysts and shareholders.
(David Karp -- Bloomberg News)
"At a minimum, you'd have to say [Qwest's offer] has the potential to be superior" to Verizon's $6.75 billion cash-and-stock offer, Notebaert said at a meeting of more than 200 analysts and shareholders at the St. Regis Hotel in New York. "We feel it's superior," and the company would consider "tweaking" its offer further, he said at the meeting, which was broadcast on the Web.
Notebaert's pitch included a PowerPoint presentation about Qwest's financial plans for a combined company. It said more than $14 billion in expenses and 12,000 to 15,000 jobs would be cut. Verizon has said it would cut about 7,000 jobs after it acquired MCI.
Qwest's investor meeting was the latest tactic in an increasingly public battle between Qwest and Verizon for the loyalties of MCI shareholders. The Wall Street Journal published a commentary by Notebaert on Monday criticizing the Verizon-MCI deal as anti-competitive, to which Verizon responded harshly.
MCI is one of the last major telecommunications companies available for sale, and Denver-based Qwest -- considered the weakest of the regional phone companies -- views acquisition of MCI as critical to its future.
This is not the first time MCI has been the subject of a bidding war. In 1997, WorldCom Inc. beat rival bidders GTE Corp. and British Telecom PLC to purchase MCI for $37 billion. After WorldCom's accounting scandal and Chapter 11 bankruptcy reorganization, the company renamed itself MCI and has been looking for a buyer.
Last month, MCI's board of directors spurned Qwest's first two offers and sided with Verizon, citing that company's stronger financial position and its better strategic assets. Qwest complained that its offer was not given a fair hearing and said it took phone calls from MCI shareholders who expressed interest in the higher Qwest offer. Last week, it submitted a retooled offer to MCI's board.
MCI Chairman Nicholas deB. Katzenbach responded in a letter dated yesterday, rejecting Qwest's claim that the MCI board did not fully entertain the offer.
"Over the past seven months, MCI and Qwest have had numerous discussions about possible transactions," Katzenbach wrote. "As you know, MCI and Qwest management and strategy teams have had 25 in-person meetings and more than 50 joint conference calls. Also, during this time, the MCI Board conducted 26 board meetings in which strategic options, including opportunities with Qwest, were discussed. Throughout this period, Qwest was given substantial access to MCI legal, financial, and operational information." MCI and its court-appointed monitor reviewed the offers and will review Qwest's most recent offer, Katzenbach said.