Rumor Mill

oo that was interesting. may i ask why did you post that? whats your comment on it and this whole thing?

I guess it was interesting to note how the courts may eventually be involved. In addition even if they are not invovled it discusses the orientations of various investors (long term vs short term). It has been my perpective for some time that the increasing short term demands of investors has hurt the strenth of the US economy.

very interesting.

this is basically over though, but i am sure courts and a proxy fight will be happening soon, though, if qwest doesnt bid higher. but how is it against the law for verizon to buy out mcip's slim's shares? i dont think that is against the law. maybe cornering the bid and voters ? since in essence slim wasnt liking the merger, and now verizon owns those shares. if slim accepts, which he did, that isnt verizon's fault. also mcip denied qwest's bid twice or three times while approving verizon's. i dont see a case. do you?

nothing against slim's sale but rather the larger issue of whether the board can accept a sale to a lower bidder. If it bipasses the board and goes to the shreholders thatn the issue of long term vs. short term investments is raised.

well, it can. the board does have a responsibility to get the best bid and stuff for the shareholders, but if you compare qwest's balance sheet and growth story to verizon's, verizon's wins hands down. mcip, can argue that verizon's balance sheet and growth will help mcip and its shareholders.

according to the article if it is determined that MCI is selling itself than the board may in fact have a fiduciary duty to take the highest bidder even though in the long run it provides less value to shareholders and greater risk.

well fiduciary responsibility is to do 2 things.
1. to make sure you get the best possible bid.
2. to make sure that the bid and company has a sound balance sheet.

verizon wins on number 2 which is most important.

if you have the best bid but will go chapter 11 soon, that is showing a terrible growth story, and a terrible bid.

thus; verizon wins. especially since verizon bought out slim's stake which means verizon has more stake in mcip. i belive slim was the only one who didnt like the deal.

fyi, carlos had 42 million shares or 13 percent ownership of mcip. verizon now owns that. he was the only signifcant shareholder that had a problem with the lower bid, now that is taken care of , so verizon should win easily now.

I agree with the ultimate resolution of this issue. The "best bid" definition you use (while I agree) is one that can reasonably be disputed by others. I may be a shareholder who wants a high bid so I can make a quick profit and get out i do not care about the balance sheet or diverse assets of Verizon.

yea, most shareholders dont care too much about that. just quick profit, however, the board must be thinking better then that. its about long term, not short term.

that is where the potential legal battle resides. If it can be construed that MCI is selling itself than apparently thier duty is to get the highest bid (short term) and nothing else.

Of course Verizon can now go to the shareholders itself and win due to its MCI stock holdings.

thats true.

so what is your opinion? (dont base it on any law or anything)

just say who wins and why. (please)

I have already stated Verizon will ultimately prevail. Any way this is veiwed Verizon can force this game to be played in a manner that they win.

Shareholder vote... Verizon wins
Board vote... Verizon wins

If the MCI board somehow chooses Qwest, Verizon can force a shareholder vote and win.

very true. excellent analysis and sound opinions. i appreciate it. people like you should be more on the cingular, verizon, nextel and sprint boards. come join!

Qwest is focusing on the quick profit for MCI investors.

Below is from their 4/6 statement.http://www.qwest.com/about/media/pr essroom?storyId=1675

Given the nature and geographic distribution of the combined Qwest/MCI assets, Qwest continues to assert that regulatory approval will be quicker, giving shareholders faster access to the proceeds and synergies of the combined organization.

wha tdo you thin of Qwests most recent response?
April 09, 2005 View printable version

Qwest Responds to Verizon Announcement

DENVER, April 9, 2005 – The following statement may be attributed to Qwest Communications International Inc. (NYSE: Q):

“By entering into its deal with Mr. Slim, Verizon has both created two classes of shareholders...
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thanks for the information. you should see verizon's statment about qwest though. let me get it...


also its ... CHRONOLOGY - Verizon, Qwest vie for MCI

http://yahoo.reuters.com/financeQuoteCompanyNewsArti ... »

March 16 -- Verizon criticized Qwest's bid, saying its smaller rival's finances were weak and it could not prove its claims of savings from buying MCI.



--

http://www.canada.com/national/nationalpost/news/sto ... »

In a statement, Verizon Communications Inc. 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 be...
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Most of us on here have restricted access and cannot view links. Please copy and paste the article for us to enjoy. 😁

here is a little snipit that you should read....



But the real winner in this battle may be Carlos Slim Helu, the Mexican telecommunications magnate who managed to turn his stake in a struggling long-distance company into over a billion dollars. Slim played the MCI (nasdaq: MCIP - news - people ) acquisition like a maestro, pulling the strings of other CEO's, driving up the value of his investment and cashing out at a price that none of his fellow investors will be likely to match.

And that's only the beginning of Slim's profit. Verizon has also agreed that in one year they will give Slim an adjustment based on appreciation of its stock price; an amount per MCI share equal to 0.7241 times the amount by which the price of Verizon's...
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Forbes.com



Mergers And Acquisitions
Verizon's Slim Shady
David M. Ewalt, 04.11.05, 1:20 PM ET

It increasingly looks like Verizon Communications will be victorious in its bid to take over MCI, leaving rival Qwest Communications in the dust after two months of wrestling. Credit Verizon CEO Ivan Seidenberg with winning another huge acquisition and increasing his company's reach.

But the real winner in this battle may be Carlos Slim Helu, the Mexican telecommunications magnate who managed to turn his stake in a struggling long-distance company into over a billion dollars. Slim played the MCI (nasdaq: MCIP - news - people ) acquisition like a maestro, pulling the strings of other CEO's, driving up the value of his investment and c...
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nice article.

my favorite snipit... But the real winner in this battle may be Carlos Slim Helu, the Mexican telecommunications magnate who managed to turn his stake in a struggling long-distance company into over a billion dollars. Slim played the MCI (nasdaq: MCIP - news - people ) acquisition like a maestro, pulling the strings of other CEO's, driving up the value of his investment and cashing out at a price that none of his fellow investors will be likely to match.

And that's only the beginning of Slim's profit. Verizon has also agreed that in one year they will give Slim an adjustment based on appreciation of its stock price; an amount per MCI share equal to 0.7241 times the amount by which the price of Verizon's common stock exc...
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While it is true that Verizon had more to work with it seems to me that the leadership is in another class. I believe this will be discussed for many years in management courses.

Qwest management had been used to dealing with firms and regulators that rolled over easily. It is similar to chess. Verizon planned ten moves ahead of Qwest.

well if your comparing it with chess. an addition to your planned 10 moves ahead situation you also have to add that they have a better position. (verizon= better position)

yea, i am interested to see about the whole legal aspects of this.

verizon owns all the viable options to win.

yep they do. very well said 🙂

http://www.nwfusion.com/news/2005/041105-mci-ipv6.html »

MCI cites headway with IPv6

By Carolyn Duffy Marsan
Network World, 04/11/05

IPv6, the long-awaited upgrade to the Internet's main communications protocol, might be showing signs of life with last week's announcement of MCI 's first commercial customer for IPv6 services.

Seattle supercomputing giant Cray is the first U.S. company to acknowledge using MCI's IPv6 overlay service. MCI says it has a handful of other U.S. corporate and government clients for the service, which the top-tier ISP quietly made available in January.

"We're seeing quite a bit of demand spanning a number of different industries," says Kevin Gatesman, senior manager of emerging technologies for MCI. "W...
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yea, they are doing very well, especially since emerging from chapter 11 and that great scandal they had lol.. (i mean the former worldcomm)

it is in part what is attractive to Qwest and Verizon. Major expansion of the customer base (large corp and government clients).

yea, large corp and gov clients dont churn as much as normal customers thats why you see nextel is doing great vs other carriers who arent becuase they have consumers not gov and corp accounts.

nextel has had a nice little niche. but that too will soon change.

it wont change. it was supposed to change 1-2 years ago when the other providers launched theiir push to talk services. no impact nothing. churn for nextel has been the same or even dropped a bit. their niche wont change, especially with the nextel/sprint merger with qchat, a highier speed data, and more applications.

niche wont change.

The niche may not but the competition will. The businesses were used to Nextel providing a unique service. It takes time for them to notice alternatives (also why leave your provider if it is working). Besides I thought I read that not all PTT services are the same. Nextel had market depth and experience that the others have not. Over time it will equalize if in fact the others want to compete in that market.

The other competitors will need to offer something special to draw clients away from Nextel (even just to get their attention).

nextel still provides a unique service. they have off network push to talk now, push to view, nationwide direct connect, international direct connect. good business applications. its not had they still have it.

it takes a long time? well over a long time nextel's churn has been going down so it looks like the push to talk and other applications are doing extremly well.

no one will beat nextel with push to talk. i said it before and i will say it again. the only thing that might hurt them is qchat, however, they own the rights to that. since they are going to do REV A, they will have qchat, and other data applications and plus sprint/nextel has the highiest arpu and highiest data arpu and good churn levels.

"The other competitors ...
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http://finance.myway.com/ht/nw/bus/20050421/hlm_bus- ... »

Verizon will increase its bid but probably maintain its existing margin.

yea, it doesnt matter. like we discussed before. qwest will be hurting by getting this deal or not getting this deal.

http://finance.myway.com/ht/nw/bus/20050423/hlm_bus- ... »

I suspect Verizon will increase their bid one last time and if necessary take it to the stockholders.


MCI declaration is designed to appease stockholders and increase the price.

to be honest, you dont need to keep posting the links, becuase i follow it every day.

they dont have to increase the bid, becuase they can just take it to the shareholders and make them vote instead of the board. (Remember now vzw owns a lot of shares i belive about 80 million or so becuase of their purchase of slim's stake.) also fyi, verizon and mcip already signed a merger agreement so verizon wont break it becuase i bet mcip will and they will owe verizon the breakup free of about $200 mill. they have five days (verizon that is) business ones also, to decide whether or not to raise their bid.

I understand the facts that you have stated. I appreciate that you are following it closely but others may not be following as closely as we are and the posts in the public forum will keep them appraised of developments.

no problem what-so-ever. i pay attention to these types of things.

so vzw has till friday to decide. what i think they might do is probably raise the offer a bit then go to the shareholders to get their rule. we know that verizon doesnt need mcip, but qwest does. we shall see on friday or before friday what happens.

This article is from weeks ago. This is not info about the most current dealings.

oops I copied the wrong link.

they dont have to pull out with the bid. there is already a merger agreement with mcip. verizon will probably go to the shareholders next.

i like this... "Verizon Communications remained coy Wednesday on whether it will sweeten its bid for MCI Inc. but did say it has no interest in a package deal that includes Qwest Communications.

"Even though we could afford it, the fact is, (Qwest) is a small company that serves very rural states for the most part and has a lot of debt," Verizon Chief Executive Ivan Seidenberg said in response to a question during an all-employee meeting. "So they're not a strong company as we would understand it. And so they don't add a lot - or would not add a lot to our business. So our focus is really - it's on MCI." "

verizon doesnt even like qwest and they dont want the 2 companies combined, i dont blame them.

whats your take?

I wouldn't want them either. I also think that the statements are an attempt to spin the news cycle and influence shareholders.

I particularly found interesting the statement that Qwest would need to have the merger go perfectly in order to experience the synergy savings that is reflected in the proposal. The fact that this has never occured in anyone's history is ignored in Qwest's detailed statment to MCI and the FCC.

As you and I stated before the cards are all in Verizon's hands. I still am curious as to the price Verizon is willing to pay or whether they are truly willing to walk away with the breakup fee.

" I still am curious as to the price Verizon is willing to pay or whether they are truly willing to walk away with the breakup fee."

yea, we have discussed this earlier, i belive. they can do 4 things.

1. continue with the merger agreement that they have and continue with the merger process
2. increase the bid
3. bring it to the shareholders
4. leave.

the problem is with number 4, since they are leaving the merger i belive VERIZON would have to pay the breakup fee.

its like this.. they already are in a merger anyway with mcip, it doesnt matter if mcip accepts qwest's bid becuase the merger agreement went through with verizon. now, i think verizon might raise it a bit, but why would they? they synergies will be great but plus...
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http://www.forbes.com/markets/2005/04/29/0429automar ... »

"Morgan Stanley reiterated an "underweight" rating on Qwest Communications International (nyse: Q - news - people ), citing deteriorating fundamentals in the wireline and the wireless businesses, as well as overhang from ongoing government investigations and shareholder lawsuits. For the first quarter, Morgan estimates a loss per share for Qwest of 8 cents, which is narrower than the consensus of a loss of 10 cents. The research firm said line loss will accelerate to 4.6%, while DSL and long distance subscriber additions will remain depressed through modestly up from the fourth quarter. "We look for wireless to improve in the first quarter with p...
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read this...


"QWEST'S OFFER IS BEYOND ITS MEANS
David M. EwaltQwest already is saddled with $17 billion in debt, and
it's financing more than $7 billion to buy MCI. How
will it pay for it?
http://www.forbes.com/2005/04/25/cx_de_0425qwest.htm ... » "

quite interesting.

It actually has, because first quarter reports for this year NEXTEL only seen like a 16% gain in revenue where Verizon Wireless seen a gain of 46% from explosive wireless growth. The last quarter of 2004 Vzw added more customers in that period than all other national carriers combined.