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Spokane, Washington  Est. May 19, 1883
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News >  Business

Rejected by MCI, Qwest likely to go it alone

Associated Press

DENVER — In the rapidly consolidating telecommunications industry, Qwest Communications International Inc. is increasingly looking like the odd man out after MCI Inc. rebuffed its multibillion-dollar takeover bid.

Although Qwest has a nationwide fiber-optics network and a local footprint across much of the West, it is weighed down by more than $17 billion in debt, the lack of a wireless division and competition from cable and high-speed data companies.

“Qwest had few options before and has less now,” in the wake of MCI accepting on Monday Verizon Communications Inc.’s $6.7 billion cash-and-stock bid, said Scott Cleland, chief executive of the independent research firm Precursor Group.

Qwest’s all-stock bid for MCI was about a half billion dollars higher than Verizon’s offer. But Verizon, the dominant local phone company in the Northeast and a top cellular player, likely won MCI’s favor because it is larger and in better financial shape than Qwest.

Shares of Qwest fell 17 cents, or 4.1 percent, to close at $3.98 on the New York Stock Exchange. The stock traded above $60 a share as recently as 2000.

A Qwest spokesman did not return a telephone message seeking comment.

Launched in 1988 by billionaire investor Philip Anschutz, Qwest entered the local phone business in 2000 with a $38 billion takeover of U S West, one of the seven Baby Bells created by the 1984 breakup of AT&T. It is the main local exchange carrier in 14 Western and Midwestern states.

Anschutz owns about 16 percent of the company’s stock and is a director on its board. With a net worth of $5.2 billion, Anschutz is No. 33 on Forbes magazine’s annual list of the 400 richest Americans. His holding company owns interests in about 100 businesses ranging from oil to railroads to real estate to professional sports teams.

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