ended its silent treatment of
Tuesday, saying it will respond to its latest unsolicited bid in due course.
The concession by the Ashburn, Va., telco came at the end of a day in which Qwest wowed Wall Street by
promising to fire everyone in sight if it can somehow complete a merger with MCI. The prospect of 15,000 job cuts so excited Wall Street that shares in Qwest and MCI both rose more than 3%, suggesting that investors expect the on-and-off bidding war between Qwest and
Of course, MCI last month shrugged off two unsolicited $8 billion cash-and-stock offers from struggling Qwest in favor of a negotiated $6.8 billion pact with Verizon. Analysts say MCI's board likely chose the lower offer from Verizon because it is financially solid, unlike Qwest, which is still saddled with hefty debt and a weak competitive position.
In a letter Tuesday to Qwest from MCI Chairman Nicholas Katzenbach, MCI says it has been anything but inattentive to Qwest. Over the past seven months, teams from MCI and Qwest have met 25 times in person and 50 times by phone. And during that time, the MCI board has met 26 times "in which strategic options, including opportunites with Qwest, were discussed," according to the letter.
But throughout the monthlong wrangle over MCI's future, some MCI shareholders have grown impatient with the long-distance giant's apparent failure to weigh Verizon's and Qwest's offers equally. The most vocal opponent of the inferior Verizon bid has been big MCI shareholder Leon Cooperman, who along with others has suggested that MCI owes its holders the duty to get the best deal regardless of what it thinks of the bidders.
Katzenbach closed the letter by saying: "I am hopeful that this letter will clear up any misconceptions and reassure you that the latest proposal from Qwest will receive the same extensive review as all previous proposals."
On Tuesday, Qwest rose 15 cents to $4.05, MCI added 61 cents to $23.36, and Verizon surged 28 cents to $36.25.