Qwest offers $8 Billion for MCI

Qwest is upping the ante and is willing to offer $8 billion for MCI, in hope that this would finally scuttle MCI’s deal with Verizon. While the deal is marginally higher than the $7.8 billion Qwest offered earlier, there are some key differences. Associated Press has all the details, but there are salient highlights.

Originally Qwest had offered $24.60 a share to MCI shareholders, which included $7.50 a share in cash, $1.60 a share in special dividends and $15.50 of Qwest common stock based on a fixed exchange ratio of 3.735 Qwest shares per MCI share and Qwest’s recent share price of about $4.15.

According to the new deal, the stock portion of the deal will hold even if Qwest shares fall below $4.15 per share. Instead of giving MCI shareholders four quarterly dividends of 40 cents and a closing payment of $7.50 a share, Qwest will give out $6 per share one-time payment upon shareholder approval and a closing payment of $3.10 a share.

This doesn’t look right – I have a feeling it exposes Qwest to machinations of Wall Street Machiavellis. Comments/Thoughts anyone?