Updated from Feb. 17
won't go quietly, that's for sure.
Dick Notebaert, CEO of the scorned
suitor, took his case public Thursday with a plaintive five-paragraph letter. The missive, addressed to MCI chairman and former U.S. Attorney General Nicholas Katzenbach, urged MCI's board to give Qwest's $7.3 billion offer a second look.
MCI representatives weren't immediately available for comment. Investors, however, expressed their feelings, pushing up shares 86 cents, or 4.2%, to $21.52 in premarket Friday trading.
On Monday, MCI agreed to a $5.3 billion merger with
. In a federal filing Wednesday, Qwest
disclosed the terms of a cash-and-stock offer that it valued at $7.3 billion.
In the letter to MCI Thursday, Qwest's chief Dick Notebaert reiterates his oft-stated contention that his company's offer was better. He also complains that MCI's board never issued a reply.
"The consideration to MCI shareholders in the Verizon proposal is substantially less than the consideration Qwest offered to MCI shareholders," the letter said.
Qwest's note adds that had MCI simply responded to Qwest's offer, Qwest could have provided "a modified offer that would be beneficial to MCI shareholders."
Notebaert did not promise to sweeten the already higher offer, though he didn't rule out that possibility. "We would expect MCI and its advisors to engage us in a meaningful dialog," he said.
Eyebrows were raised in some quarters when MCI acceded to Verizon's $5.3 billion bid, considering that reports had put Qwest's offer significantly higher. (The Verizon bid is worth $6.8 billion if you include special dividends to be paid out of MCI's ample piggy bank.)
But observers and analysts say the MCI board likely took the Verizon offer because it aligned the company with a much stronger player in the industry. Additionally, Qwest would have to raise cash by increasing its debt to investors or bankers. As of the end of last year, Qwest had $16.7 billion in debt, compared with $1.8 billion in cash and $2.4 billion in investments.
On Thursday, all three stocks declined on a down market day, with Qwest dropping 13 cents to $3.84, MCI sliding 21 cents to $20.66 and Verizon falling 44 cents to $35.68.