Frontier Corp.'s board of directors decided today to take no action on the unsolicited $11.3 billion bid from upstart telecommunications company Qwest, setting the stage for Qwest to either restructure its offer or take it directly to shareholders.
There was no word from Qwest's other target, US West Corp., for which Qwest made a companion offer worth $32.3 billion.
The audacious attempt by Qwest Communications International Inc. to break up deals Frontier and US West had to merge with Global Crossing Ltd. lost much of its luster as Qwest's shares tumbled 20 percent after announcement of the hostile bids on Sunday.
The value of its offer for the two phone companies also has declined by 20 percent, to $43.6 billion from the $55 billion announced Sunday, putting it neck and neck with the $43.9 billion bid by Global Crossing.
Both Qwest and Global Crossing are building worldwide fiber-optic cable networks to bring consumers and businesses a host of services, including movies, television, radio, e-mail and Internet access.
"The current circumstances surrounding the Qwest proposal do not warrant any change at this time in our current initiatives that are designed to move Frontier's transaction with Global Crossing toward a prompt closing," Joseph P. Clayton, Frontier's chief executive officer, said in a statement.
Frontier, based in Rochester, N.Y., is the nation's No. 5 long-distance phone company and offers high-speed Internet access.
Qwest wants to buy Frontier and US West, a Denver-based Baby Bell, to provide the customers and revenue to complete its plan to become a global provider of high-speed Internet access and telecommunications.
Global Crossing has said it had no plans to sweeten its bid for US West and Frontier.