Verizon wins battle for MCI
Verizon has won the bidding for MCI Inc. a second time, agreeing to pay $1 billion more for the long-distance telephone company, and yet still considerably less than a rival bid from Qwest.
Investors don’t seem convinced Qwest Communications International Inc. will admit defeat, however. MCI’s stock shot higher after the $7.64 billion deal was announced, surpassing the $23.50 price per share Verizon Communications Inc. has agreed to pay.
The new agreement increases the amount of cash MCI stockholders will receive for their shares while guaranteeing a minimum value for the Verizon shares that they’ll get as the balance of the payment.
Qwest, the smallest of the nation’s four big local phone companies, said it will reassess the situation, but reiterated its position that its offer of $8.45 billion, or $26 per share, is superior.
This is now the second time MCI has opted for a lower payment from Verizon out of concern about Qwest’s questionable financial health and business prospects. When MCI’s board accepted Verizon’s original $6.75 billion offer in mid-February, it did so with an $8 billion bid on the table from Qwest.
The board’s continuing preference to merge with a stronger partner made it unnecessary for Verizon to match Qwest’s offer in boosting its bid.
New York-based Verizon tried to hold its ground on price after the initial agreement even as Qwest rallied some MCI investors to agitate for the higher-priced bid. But in the ensuing weeks, Qwest raised its bid by a half-billion dollars and Verizon’s stock has declined, further widening the gap between what the two companies were offering MCI, which is based in Ashburn, Va.
That intensified the pressure on MCI’s board to reconsider Denver-based Qwest’s courtship or at least secure more money from Verizon.
The new deal comes about two months after SBC Communications Inc. agreed to pay $16 billion to acquire AT&T Corp., setting off the scramble by Verizon and Qwest to respond with a buyout of MCI.
Disney, Miramax founders settle
Miramax co-founders Bob and Harvey Weinstein will leave The Walt Disney Co. in Sept. to launch their own film distribution company, Disney and the Weinsteins said Tuesday
As expected, Disney will retain the Miramax name and the library of more than 800 films. The Weinsteins will keep the Dimension Films label.
The Weinstein brothers will stay at Disney on a non-exclusive basis, which will give them a chance to seek financing for their new, yet unnamed, company. Disney will name a new head of Miramax by July, the company said.
During a transition period from July through Sept., the Weinsteins will work with the new leadership, which will report directly to Dick Cook, chairman of The Walt Disney Studios. The Weinsteins will not make any new commitment to the development or purchase of films on behalf of Miramax. No financial terms were given.
The two companies will work together after the separation to potentially collaborate on as many as 25 or more projects, including co-productions of sequels to such film franchises as “Spy Kids” and “Scary Movie.”