TELECOM Digest OnLine - Sorted: Qwest's Offer Is Beyond Its Means

Qwest's Offer Is Beyond Its Means

Eric Friedebach (
26 Apr 2005 15:59:15 -0700

David M. Ewalt, 04.25.05,

NEW YORK - For the first time since the bidding war over MCI erupted
two months ago, Qwest Communications has taken the lead over
competitor Verizon Communications in the fight for MCI. But the bad
news for Qwest is that even if it wins, it loses.

Chances are good that Verizon will produce more cash and walk away
with MCI in the end. Yet for now Qwest chief executive Richard
Notebaert can probably taste victory. After being repeatedly brushed
off and ignored by MCI's board, he's finally gotten their attention
and approval. What once looked like a long shot bid to shore up
Qwest's faltering financials looks momentarily plausible.

But Qwest had to ramp up its bid so ferociously to get noticed that
now it's faced with a payout that's well beyond its means. At this
price, Qwest's proposed merger would be so hard to pay for it would
probably negate the value of doing it in the first place.

Eric Friedebach
/An Apollo Sandwich from Corky & Lenny's/

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