again rejected a takeover offer from
, saying "uncertainties" about the $9 billion bid led it to prefer a lower offer from
Qwest responded with a statement suggesting it would consider a hostile bid for the Virginia-based long-distance company.
MCI, which has expressed doubts about the sustainability of Qwest's stock price and the suitor's heavy debt load, is now poised to be acquired by Verizon for cash and stock worth about $23.10, or $7.5 billion. Qwest had set a midnight Tuesday deadline on its competing bid, its third for MCI, which came out to about $27.50 an MCI share.
"MCI's board also took into consideration a number of uncertainties in terms of value and likelihood of closing, including the negative sentiment among MCI customers toward a Qwest combination," MCI said. "Other concerns centered on Qwest's synergy assessments, as well as the risks associated with Qwest's contingent liabilities. In the face of these risks, MCI was not willing to jeopardize the certainty of its Verizon agreement for the uncertainties surrounding the Qwest proposal."
News reports said Qwest turned down a request from MCI to raise its bid to $30 a share late Tuesday.
In its response, Qwest noted that its offer was 20% higher than Verizon's, with greater equity participation for MCI holders in the combined company.
"MCI's board of directors has chosen to reject what we believe is a superior offer to acquire MCI. The company is currently weighing its options and shareholders will dictate the next steps in this process," the company said.
For its part, Verizon said it's ready to move forward with its transaction.
"We are pleased to see the process move to the next step where we can begin the proxy phase of this transaction," said Verizon. "We are looking forward to working with MCI shareholders to get the deal done promptly."