WASHINGTON – Verizon Communications Inc. (VZ) said Monday that Qwest Communications International Inc. (Q) had made "gross exaggerations" of the benefits and financing of its $8.45 billion bid for MCI Inc (MCIP).
In a letter to MCI's management, Verizon Chairman and Chief Executive Ivan Seidenberg said Verizon was committed to closing its agreement to buy MCI and "will not be distracted by Qwest's histrionics, false statements and grossly exaggerated synergy claims."
Verizon agreed last month to buy MCI for $6.75 billion, but several large MCI shareholders have objected to the deal. Qwest, the fourth-largest U.S local telephone company, has said it could generate $14.8 billion in cost cuts from a deal with MCI, more than double the amount Verizon has forecast from its proposal.
Qwest spokesman Tyler Gronbach said Qwest "has submitted a clearly superior offer for MCI. Any attempt to mask that fact is not in the best interest of MCI shareowners."
Qwest raised its bid for MCI last week from $8 billion and MCI's board said it would respond by March 28. Analysts and investors expect Verizon will likely raise its bid, but not match Qwest's offer.
In its letter, Seidenberg said Qwest would likely fail to meet most of its goals for cost savings from a merger with MCI and questioned whether a merged Qwest-MCI would have enough cash to survive.