102 How its
done in the world of Telecom. High Finance
Ebbers of MCI WorldCom Found Guilty, Then Verizon Qwest
Offers $8billion for MCI Qwest Raises Its Bid for MCI to
A federal jury convicted former
WorldCom Inc. Chief Executive Bernard J. Ebbers of
orchestrating an $11-billion accounting fraud. The verdict
could have deep repercussions for other disgraced executives
who say they were unaware of financial scams taking root
Former MCI WorldCom Chief Found
Guilty of Fraud A federal jury convicted former WorldCom
Inc. Chief Executive Bernard J. Ebbers of orchestrating an
$11-billion accounting fraud. The verdict could have deep
repercussions for other disgraced executives who say..
Former WorldCom Chief Found Guilty of
Ebbers, 63, was found guilty of
securities fraud, conspiracy and filing false documents with
regulators. He was convicted on all nine counts that he
Legal experts said the jury's
decision boded poorly for toppled executives Kenneth L. Lay
of Enron Corp. and Richard Scrushy of HealthSouth Corp., who
are employing variations of the above-the-fray defense.
Ebbers will be sentenced June 13, and
a lengthy sentence could effectively mean life behind bars.
He declined to comment after the verdict.
102 The Qwest
Offer - $8billionfor MCI Qwest Raises Its Bid for MCI to
The cash-and-stock offer is more than
$1.4 billion higher than Verizon's competing proposal. A
hostile takeover attempt is growing more likely
Edging closer to launching a hostile
takeover attempt, Qwest Communications International Inc. on
Thursday raised its bid for long-distance carrier MCI Inc.
again -- this time to $8.94 billion in cash and stock.
The increase puts Qwest's bid more
than $1.4 billion higher than the offer MCI's board accepted
Tuesday from Verizon Communications Inc., the nation's
largest phone company.
MCI said its board, which has
rejected Qwest three times so far, "will review the revised
proposal and respond accordingly." Qwest said the company
must respond by midnight Tuesday.
"The ball is back in Verizon's court
and our baseline assumption is it will
come back to
MCI with an improved offer," said Wall Street analyst David
Barden of Banc of America Securities.
Verizon wouldn't comment on Qwest's
bid or on what it might do.
The latest revised bid helped spur
MCI's stock to a 12-month high of $24.90 a share, up 45
cents on Nasdaq.
Qwest has hired proxy advisor Altman
Group Inc., which helps solicit support from shareholders in
takeover battles. Qwest has been talking with large MCI
shareholders dissatisfied with the lower Verizon offer.
But launching a hostile takeover is
expensive, and Qwest already is offering a purchase price
well above its own stock market value, which was $6.7
billion based on Thursday's closing stock price of $3.70 a
share, down 7 cents on the New York Stock Exchange.
MCI's directors believe a deal with
Verizon makes more sense because together they can compete
better for corporate and government customers against the
goliath company being put together with SBC Communications
Inc.'s pending acquisition of AT&T Corp., the nation's
largest long-distance company.
Verizon also is financially stronger
than Qwest and operates the second-largest mobile phone
company. Qwest, the smallest of the Bell operating
companies, which own most of the nation's local phone
networks, is the only one of those companies without its own
In a letter Thursday, Qwest Chairman
Richard C. Notebaert chastised MCI's board for consistently
favoring Verizon despite Qwest's higher bids and for
secretly negotiating an amended deal with Verizon when it
was supposed to be focused on Qwest's last proposal.
In Thursday's revised offer, Qwest
said it would pay $27.50 for each MCI share, including
$13.50 in cash and $14 in Qwest stock.
Its previous offer of $25.60 a share,
amounting to $8.32 billion, consisted of $10.10 in cash and
$15.50 in stock.
Verizon's revised bid consists of
$8.35 in cash and $14.75 in stock, adding up to $23.10 a
share, or a total of $7.51 billion.
Verizon shares rose 7 cents to $35.50
on the New York Stock Exchange.
MCI Wants to
Reopen Talks With Qwest To Raise Its Stock Quotes
April 2, 2005 / The Denver-based
suitor is skeptical of the request and reiterates its
MCI Inc. invited Qwest Communications
International Inc. to reopen merger talks Friday, just three
days after the long-distance phone company agreed to a
sweetened $7.5-billion buyout from Verizon Communications
Inc. and a day after Qwest raised its bid to nearly $9
Qwest dismissed the gesture as
disingenuous and reiterated a Tuesday deadline for MCI to
accept or reject its offer. The Denver-based company noted
that when MCI agreed to the new Verizon deal Tuesday, it
notified Qwest that there was no need for additional
"Therefore, it is questionable what
additional information the MCI board would require at this
time," Qwest said in a statement.
The news release also criticized MCI
for agreeing to new provisions in the Verizon deal that
handcuff MCI's ability to terminate that contract in favor
of a superior proposal.
"We urge the MCI board to cease its
and run a fair, transparent, complete and
timely sales process."
MCI's stock rose for a fourth
straight session Friday -- to a level nearly 10% higher than
the price Verizon has agreed to pay -- as investors again
speculated that either Verizon would be forced to boost its
bid again or Qwest might pull off an upset in the two-month
Shares of MCI rose 39 cents to $25.29
on Nasdaq. Verizon shares fell 31 cents to $35.19, while
Qwest shares slipped 6 cents to $3.64, both on the New York
Instead of bidding higher, Verizon
could try to halt the bidding by triggering a provision in
its agreement that would require a straight vote by MCI
shareholders on the current deal.
In that scenario, Verizon would be
betting that longer-term MCI investors are too concerned
about Qwest's financial frailty and whether the Qwest shares
they would receive as payment would hold their value. Much
of the pressure on MCI's board to accept Qwest's offer has
come from hedge funds and other short-term investors who
would likely dump their Qwest shares soon after receiving
"We may ask for a vote at some point
and have that right under our agreement of
[Tuesday], but have not yet. No comment on whether
we will," Verizon spokesman Eric Rabe said.
Deal With Verizon Soured May Pull Out of Bidding
says it will end its pursuit if the long-distance carrier
prefers Qwest's offer.
2005 / In a statement, Verizon
said, "If the MCI board, capitulating to Qwest's artificial
deadline, declares this bid to be 'superior,' it would seem
to us that the decision-making process is being driven by
the interests of short-term investors rather than the
company's long-term strength and viability."
"Should this occur, we would no longer
be interested in participating in such a process," the
statement said, we'll abandon our $7.5-billion buyout offer
for MCI Inc. rather than pay more should the long-distance
telephone company declare a rival $8.9-billion offer from
Qwest Communications International Inc. as superior.
Shares of Ashburn, Va.-based MCI fell
after the announcement, which came one day before a deadline
set by Qwest for MCI to accept or reject its bid.
MCI declined to comment on the latest
move in the two-month bidding war.
The company, formerly known as WorldCom
Inc., also wouldn't say whether it planned any response
before Qwest's deadline.
Shares of MCI fell 21 cents to $25.08
on Nasdaq despite rising as high as $25.50 earlier in the
session amid hopes the bidding would produce a higher
Shares of Verizon gained 46 cents to
$35.65, and Qwest shares rose 18 cents to $3.82, both on the
New York Stock Exchange.
The Verizon deal values MCI at $23.10 a
share, to be paid in stock and cash. That's an increase from
$20.75 under the agreement the two companies reached in
Qwest's offer is worth $27.50 in cash
and stock, nearly 20% more than the latest Verizon deal.
But worries about Denver-based Qwest's
weak financial health and the long-term value of its shares
have twice prompted MCI's board to accept lower-priced
offers from New York-based Verizon as a safer
Rejects Qwest Deal To Save Verizon Offer
6, 2005 / MCI Inc. late Tuesday rejected an $8.9-billion
buyout proposal from Qwest Communications International
Inc., opting instead to stick with a $7.5-billion offer from
Verizon Communications Inc.
Qwest said it would evaluate the situation
before deciding its next move. "We are weighing our options,
and shareholders will dictate the next steps in the
process," Qwest spokesman Steve Hammack said. "MCI's board
of directors has chosen to reject what we believe is a
superior offer to acquire MCI."
A call seeking comment from MCI was not
Qwest previously had said it would hold
MCI to a midnight deadline. Qwest Chief Executive Richard
Notebaert had told MCI's board in a letter that he would
leave the offer on the table if MCI notified Qwest by
midnight and publicly declared the bid superior to the
Verizon offer no later than noon EDT today.
Qwest issued the deadline to MCI last
week when it raised its bid by nearly $500 million to $8.9
The news was announced after markets
closed. MCI fell 7 cents to $25.01 on Nasdaq. Qwest rose 4
cents to $3.86 and Verizon gained 12 cents to $35.77 on the
New York Stock Exchange.
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How its done in the world of Telecom.
Ebbers of MCI WorldCom Found Guilty, Then
Verizon Qwest Offers $8billion for MCI Qwest Raises
Its Bid for MCI to $8.94
Deal With Verizon Soured May Pull Out of Bidding
Television International Magazine's Person Of The
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