Verizon paying $1.1 billion for MCI stake

Verizon Communications Inc. said Saturday it is paying $1.1 billion to acquire a 13.4 percent stake in MCI Inc. directly from its largest single stockholder.

The transaction removes a major wild card in Verizon’s bid to fend off a higher-priced offer to acquire MCI by Qwest Communications International Inc. of Denver.

The New York telephone company is paying $25.72 per share in cash to Mexican billionaire Carlos Slim Helu, who had previously expressed dissatisfaction with the offers from both Verizon and Qwest.

The deal values Slim’s 43.4 million shares at a 11 percent premium to the $23.10 per share Verizon agreed to pay MCI’s other shareholders two weeks ago in a sweetened $7.5 billion deal.

Verizon Chief Executive Ivan Seidenberg appeared to leave open the possibility that Verizon might increase its payout to the other shareholders of MCI, based in Ashburn, Va.

“While this was an opportunity for us to purchase a block of shares under unique circumstances and is an important step forward in our acquisition of MCI, we will continue to assess the situation as we move toward a vote by the MCI shareholders,” Seidenberg said in a statement.

Verizon and Qwest, two of the nation’s biggest telephone companies, have been battling for two months to win MCI and its national fiber-optic network and lucrative roster of government and corporate clients.

MCI’s board has twice rejected higher-priced offers from Qwest out of concern over that company’s weak financial condition.

Qwest criticized Verizon’s deal with Slim and said it would continue its pursuit of MCI.

For Subscribers

FOR SUBSCRIBERSCBP leaders cut out of Trump ad buy decision

FOR SUBSCRIBERSAmerican passenger drafted goodbye texts to her family as Flydubai plane plummeted

FOR SUBSCRIBERSCornell rape allegation pushes embattled New York prosecutor into national spotlight

FOR SUBSCRIBERSAbdul El-Sayed tries to woo MAHA voters as Democrats seek inroads with RFK’s supporters

FOR SUBSCRIBERSKratom-like substances are popping up in a typically benign supplement

FOR SUBSCRIBERSGOP super PAC increases its spending for Sen. Jon Husted in tough Ohio race

FOR SUBSCRIBERSRecords reveal tumultuous marriage between slain New York Times executive and wife

FOR SUBSCRIBERSFrom clean energy warrior to ‘wall of shame,’ James Talarico reverses on a fossil fuel money pledge

FOR SUBSCRIBERSCongressional staff planned official trip with luxury stops in Italy and France weeks before election

FOR SUBSCRIBERSA harrowing ordeal aboard an Israel-bound plane

FOR SUBSCRIBERSOpenAI CEO Sam Altman to skip congressional hearing on rogue AI agents

FOR SUBSCRIBERSKey DOJ lawyers departed Trump ‘grand conspiracy’ probe amid pressure to produce, source says

FOR SUBSCRIBERSTrump’s new AI chatbot often links to a site launched under Clinton 26 years ago

FOR SUBSCRIBERSAt MAHA summit, industry CEOs the movement once vilified take the stage

FOR SUBSCRIBERSThis Paralympian has two goals: Win medals and give away $500,000 to her teammates

For Subscribers

FOR SUBSCRIBERSCBP leaders cut out of Trump ad buy decision

FOR SUBSCRIBERSAmerican passenger drafted goodbye texts to her family as Flydubai plane plummeted

FOR SUBSCRIBERSCornell rape allegation pushes embattled New York prosecutor into national spotlight

FOR SUBSCRIBERSAbdul El-Sayed tries to woo MAHA voters as Democrats seek inroads with RFK’s supporters

FOR SUBSCRIBERSKratom-like substances are popping up in a typically benign supplement

FOR SUBSCRIBERSGOP super PAC increases its spending for Sen. Jon Husted in tough Ohio race

FOR SUBSCRIBERSRecords reveal tumultuous marriage between slain New York Times executive and wife

FOR SUBSCRIBERSFrom clean energy warrior to ‘wall of shame,’ James Talarico reverses on a fossil fuel money pledge

FOR SUBSCRIBERSCongressional staff planned official trip with luxury stops in Italy and France weeks before election

FOR SUBSCRIBERSA harrowing ordeal aboard an Israel-bound plane

FOR SUBSCRIBERSOpenAI CEO Sam Altman to skip congressional hearing on rogue AI agents

FOR SUBSCRIBERSKey DOJ lawyers departed Trump ‘grand conspiracy’ probe amid pressure to produce, source says

FOR SUBSCRIBERSTrump’s new AI chatbot often links to a site launched under Clinton 26 years ago

FOR SUBSCRIBERSAt MAHA summit, industry CEOs the movement once vilified take the stage

FOR SUBSCRIBERSThis Paralympian has two goals: Win medals and give away $500,000 to her teammates

“By entering into its deal with Mr. Slim, Verizon has both created two classes of shareholders and called into question the MCI board’s previous determination that Verizon’s lower offer to the other MCI shareholders was superior and fair,” Qwest said in a statement Saturday. “We believe Qwest has a superior proposal for all shareholders.”

MCI spokesman Peter Lucht declined to comment.

The price being paid for Slim’s MCI shares is almost even with Friday’s closing quote of $25.84, but still about 7 percent below Qwest’s latest offer of $27.50 a share.

Qwest, which has bid $8.9 billion for MCI, said Friday that a telephone poll showed shareholders who own more than half of MCI’s outstanding stock believe Qwest’s bid is superior to Verizon’s offer. However, Verizon’s agreement with Slim removes a large potential source of dissent against its deal.

Slim shares were not included in the poll results, a source close to Qwest, who asked to remain anonymous, said on Saturday. Qwest could submit a new bid or take its case directly to shareholders through a tender offer or proxy fight.