Qwest sends MCI merger ultimatum
Qwest issued a deadline to MCI on Monday, giving the long-distance telephone company one week to decide if it will jilt merger partner Verizon in favor of a richer buyout proposal from Qwest.
The ultimatum was delivered in a letter to MCI’s board that also said Qwest Communications International Inc. lenders have committed an extra $500 million in financing to back the $8.45 billion bid, which is currently worth $1.9 billion more than the Verizon deal.
MCI Inc., formerly known as WorldCom, declined to comment on the letter or on whether a week of negotiations with Qwest had proven fruitful.
Verizon Communications Inc. agreed last week to give MCI until the end of Monday to meet with Qwest. There was no requirement, however, that MCI immediately issue a verdict on those talks or on Qwest’s efforts to dispel worries that its financial ailments make its higher bid too risky to accept. Qwest’s letter said it now has $5.75 billion worth of outside financial backing and has submitted a revised proposal to MCI.
The deadline may turn the tables on MCI, which until now has set most of the rules for Qwest’s unsolicited courtship.
Having spurned Qwest’s original $8 billion offer, MCI has seemed to hold the upper hand. Its board has shown little enthusiasm or urgency to discuss even the sweetened $8.45 billion bid Qwest submitted two weeks ago despite growing pressure from some MCI shareholders to consider the higher bid.
EU redesignates Windows product
Brussels, Belgium Microsoft Corp. said Monday it would use an “N” to designate Windows XP versions stripped of the company’s media player to comply with an antitrust judgment from the European Union.
The agreement with the EU came after antitrust regulators rejected Microsoft’s first choice, “Windows XP Reduced Media Edition,” on grounds it would discourage sales and mislead customers.
The player-free operating system will simply go by “Windows XP Home Edition N” and “Windows XP Professional Edition N” — the “N” standing for “not with media player.”
A year ago, EU regulators ordered Microsoft to produce for European consumers a version of Windows without media player software for viewing video and listening to audio. Regulators had ruled that Microsoft abusively wielded its monopoly to lock out competitors, such as RealNetworks Inc. and its Real Player software. Microsoft also was fined a record $665 million and ordered to share some software blueprints. The Redmond, Wash.-based company is appealing.
Gas prices rise sharply
The retail price of gasoline jumped 4 cents last week to average $2.15 per gallon nationwide, the Energy Department reported Monday.
The weekly government survey said the average price nationwide of regular-grade unleaded gasoline rose 4.4 cents last week to $2.153 per gallon. Prices are 39.5 cents higher than a year ago.
Pump prices are highest on the West Coast, averaging $2.318 per gallon, and cheapest on the Gulf Coast, averaging $2.079 per gallon. In the Midwest, gas averages $2.138 per gallon.
One of the key factors driving the price of gasoline is the rising cost of oil — the result of strong demand, tight global supplies, geopolitical uncertainties and the falling value of the dollar.