Verizon Communications to buy 13.7pc stake in MCI

WASHINGTON - Verizon Communications has agreed to buy the 13.7 per cent stake in MCI held by its largest shareholder, Mexican telecommunications magnate Carlos Slim Helu, for US$1.1 billion ($1.56 billion) in cash.

The move recasts the two-month battle for control of MCI, which had accepted Verizon's US$7.6 billion takeover offer over a US$9.1 billion bid by Qwest Communications.

Qwest said on Friday a poll it commissioned found that investors owning more than half of MCI shares supported its bid over the Verizon deal, as Qwest mulled a possible hostile bid for MCI. Several large MCI shareholders had said publicly the Qwest bid was superior.

Verizon said it agreed to buy 43.4 million MCI shares from Slim's companies for US$25.72 a share in cash. In addition, it will pay Slim's companies a bonus in a year should Verizon's share price exceed US$35.25.

Under its deal with MCI, Verizon has offered to pay MCI shareholders US$23.50 per MCI share, with US$8.75 per share in cash and US$14.75 per MCI shares in Verizon stock.

MCI shares closed on Friday at US$25.84 as investors anticipated a higher offer from Verizon or a hostile bid by Qwest. In a statement, Verizon chairman Ivan Seidenberg said it would "continue to assess the situation as we move toward a vote by the MCI shareholders".

 

- REUTERS