Battle for MCI: Verizon is Back, MCI likes it


The New York Times reports that Verizon has offered $26 a share, up from its previous offer of $23.10 a share. Qwest has offered to pay $9.8 billion, or $30 a share, for MCI. MCI believes that Verizon deal is better, and is going with that. “MCI’s Board noted that a large number of MCI’s most important business customers had indicated that they prefer a transaction between MCI and Verizon rather than a transaction between MCI and Qwest,” the statement said. Waiting for Qwest to respond….


Jesse Kopelman

Why? For the same reason when I worked for AT&T Wireless and AT&T was buying cable companies, I didn’t like it. Why divert the focus? If VZW is the growth engine, that’s where the attention needs to be. If VZW is generating the cash, why should they like it if that cash goes into resusitating MCI instead of growing VZW? The question I’d e asking myself as a VZW employee at this point is what has Verizon done for me lately? How can it ever be good news that my corporate parent is wasting the money I’m bringing in on overpaying for a has been company? Anyway, how can you say that nothing Verizon does has any effect on VZW and then turn around and say this deal is good for VZW?

Charlie Sierra


Huh? Why?

Nothing that Verizon does has any recourse to VerizonWireless.

In fact this deal (albeit, way overpriced) is very good news for VZW. And that means lots of FREE money for Vodafone.

If VZW ever IPOs, which I suspect is not likely, it would be a monster, but by the same token, allowing public shareholders means you might have to pay a dividend to outsiders, when the whole purpose of VZW is to funnel loads of cash to the mother ship.

So unless you can get a super high IPO premium, it doesn’t make sense.

Well maybe in ~2010.

Jesse Kopelman

I bet Verizon Wireless is really wishing it had already been spun off by now . . .

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