Qwest, MCI Talking Again - TheStreet







are talking again.


(VZ) - Get Report

Wednesday cleared merger partner MCI to resume discussions with spurned suitor Qwest. The move comes after Verizon and Qwest again traded barbs over which would make a better home for MCI.

"MCI's Board has determined to continue its discussions with Qwest and has instructed its advisors and management to begin this process promptly," MCI said in a postclose press release. "Verizon has consented to MCI's request for a waiver permitting these discussions."

Last month MCI's board chose Verizon's $6.75 billion bid over an apparently superior $8 billion offer from Qwest, citing Verizon's financial and operational strength. Earlier this month, Verizon, which included a noncompete clause in its merger agreement with MCI, cleared the Ashburn, Va., long-distance telco to talk with Qwest for two weeks to "clear the air" over the various bids.

The two-week negotiating period expired last Thursday, with Qwest upping its stock-and-cash bid to $8.5 billion. But the market yawned and MCI's board withdrew to consider its alternatives, saying it would announce its decision March 28.

Qwest then complained about MCI's failure to continue talks aimed at clarifying specific issues in the merger talks. That led Verizon chief Ivan Seidenberg to make his latest scathing comment about Qwest. He said in a letter to MCI's board that Qwest's presentation "might be more appropriately considered in the category of Modern Fiction."

On Wednesday, Qwest rose 3 cents to $3.80, MCI added 78 cents to $23.75 and Verizon surged $1.04 to $35.50.