NEW YORK – Qwest Communications International Inc. (Q) on Tuesday reiterated it would withdraw its $9.1 billion takeover bid for MCI Inc. (MCIP) if the long-distance telephone failed to meet a midnight deadline to deem it superior to a rival deal with Verizon Communications Inc. (VZ).
The takeover battle for MCI has lingered for two months, with Qwest putting increased pressure on the No. 2 U.S. long-distance company to scrap its $7.6 billion agreement with Verizon.
Qwest had said it would pull its offer if MCI failed to accept it by midnight on Tuesday and publicly disclose that choice by noon on Wednesday.
In a letter to MCI's board, Qwest said it got commitments for additional financing, increasing the amount to $6.25 billion from $5.75 billion, which it contended would allow it to close the deal, make necessary capital improvements and add new services.
In rejecting Qwest's previous overtures, MCI had cited the financial stability and long-term growth prospects offered by Verizon.
Qwest said its offer would remain in place through June 19 if MCI declared its bid superior and recommended it to shareholders. Verizon has said it would walk away, rather than countering with a new bid, if MCI chose the Qwest offer.
While Qwest said it felt there was no need to change its offer, which it called its "best current" bid, it asked MCI to contact it before accepting any revised offer from Verizon, which had bid $7.6 billion.
If rejected again, Qwest still could bypass MCI's management and brings its offer directly to the long-distance telephone company's shareholders.
Qwest balked at several changes it said MCI requested, such as richer retention packages for MCI executives. It also said MCI requested to be relieved of its obligation to be compliant with federal regulations requiring corporate managers to explain how they keep their financial houses in order.
MCI blasted back, saying Qwest misrepresented its requests. MCI said it sought a broad retention program for employees, rather than just key executives.
Ashburn, Va.-based MCI also said it was in compliance with the Sarbanes-Oxley regulations (search).
Verizon declined to comment.