Verizon May Pull Out of MCI Bidding

Verizon Communications Inc. threatened Monday to abandon its $7.5-billion buyout offer for MCI Inc. rather than pay more should the long-distance telephone company declare a rival $8.9-billion offer from Qwest Communications International Inc. as superior.

Shares of Ashburn, Va.-based MCI fell after the announcement, which came one day before a deadline set by Qwest for MCI to accept or reject its bid.

In a statement, Verizon said, “If the MCI board, capitulating to Qwest’s artificial deadline, declares this bid to be ‘superior,’ it would seem to us that the decision-making process is being driven by the interests of short-term investors rather than the company’s long-term strength and viability.”

“Should this occur, we would no longer be interested in participating in such a process,” the statement said.

MCI declined to comment on the latest move in the two-month bidding war.

The company, formerly known as WorldCom Inc., also wouldn’t say whether it planned any response before Qwest’s deadline.

Shares of MCI fell 21 cents to $25.08 on Nasdaq despite rising as high as $25.50 earlier in the session amid hopes the bidding would produce a higher takeover price.

Shares of Verizon gained 46 cents to $35.65, and Qwest shares rose 18 cents to $3.82, both on the New York Stock Exchange.

The Verizon deal values MCI at $23.10 a share, to be paid in stock and cash. That’s an increase from $20.75 under the agreement the two companies reached in mid-February.

Qwest’s offer is worth $27.50 in cash and stock, nearly 20% more than the latest Verizon deal.

But worries about Denver-based Qwest’s weak financial health and the long-term value of its shares have twice prompted MCI’s board to accept lower-priced offers from New York-based Verizon as a safer alternative.