Denver-based U S West said the sale will reduce its fourth-quarter earnings by 44 cents per share after taxes. Analysts polled by
First Call/Thomson Financial
expect U S West to log fourth-quarter earnings of 78 cents a share.
U S West, which flirted with a merger with Global Crossing earlier this year, bought 39 million shares at 62 3/4 in the company in May as part of that merger agreement. Global Crossing shares closed at 47 13/16 Thursday, meaning U S West will take about a $360 million hit on the deal. The 24 million shares the company will sell are valued at about $1.15 billion.
U S West said it is selling the shares "to gain immediate financial proceeds as well as participate in a significant portion of the appreciation potential of Global Crossing's stock." A U S West spokesman said the company is selling the shares now for tax-planning reasons; he declined to comment on how the company would use the proceeds from the sale. Once the deal is completed, U S West will still own about 13 million shares of Global Crossing.
U S West has agreed to be acquired by
, a deal that is expected to be completed by mid-2000.
U S West shares were up 3/8 to 70 9/16 in early trading Friday. (U S West ended up 1 13/16, or 3%, to 72 Friday, while Global Crossing finished up 2 3/16, or 5%, to 50. Qwest Communications closed up 7/8, or 2%, to 43.)