WASHINGTON – Qwest Communications International Inc. (Q) said Friday that its poll of MCI Inc.'s (MCIP) shareholders found that owners of more than half of MCI's stock supported its $9.1 billion bid for the company over Verizon Communications Inc.'s (VZ) deal.
The poll puts Qwest another step closer to launching a hostile bid for MCI, the second-largest U.S. provider of long distance and business telecommunications. MCI rejected Qwest's bid on Wednesday in favor of Verizon's $7.6 billion offer, citing Verizon's financial stability and growth prospects.
Qwest spokesman Bob Toevs said the poll had been conducted this week by the Altman Group, an expert in proxy solicitations. He declined to quantify exactly how much support Qwest's poll found.
MCI said that without reviewing the survey or its methodology it could not comment. A Verizon spokesman said that "with a signed agreement and the support of MCI, we intend to work closely with MCI shareholders to get this transaction approved."
Several large MCI shareholders have called Qwest's bids superior, saying the Verizon price was too low. MCI's shares closed up 21 cents to $25.84 in trading Friday on Nasdaq, well above the $23.10 price of Verizon's offer, as investors anticipate a hostile bid by Qwest or a higher price from Verizon.
Verizon and Qwest see buying MCI as the best way to grab a foothold in the market for telephone and data services to large corporations. While such a deal would have a small impact on Verizon, it would transform the smaller Qwest, which is also eyeing MCI's cash flow as a way to reduce its own $17 billion debt load.
MCI had languished on the market for several months following its emergence from the WorldCom bankruptcy last April. But after SBC Communications (SBC) agreed to buy AT&T Corp. (T) for $16 billion, the bidding for MCI quickened.
In rejecting Qwest's latest offer, MCI said Verizon's bid offered more certainty of closing, while Qwest's bid was unpopular with its customers. MCI also said it was concerned with Qwest's cost-saving assessments and its liabilities.