No Word of New Offer for MCI

A deadline in an unusual bidding war to acquire long-distance carrier MCI Inc. passed Friday night without word of a new offer from regional giant Verizon Communications Inc.

Verizon, the No. 1 U.S. phone company, had until 9 p.m. PDT to counter an offer of $9.75 billion, or $30 a share, from another regional carrier, Qwest Communications International Inc.

MCI’s board, which had accepted Verizon’s lower bid of $7.5 billion, or $23.10 a share, declared last Saturday that Qwest’s latest bid was superior to Verizon’s, setting up Friday’s deadline for a response.

But deadlines in this three-month battle for MCI have passed before. Some people close to the fight believe Verizon must act by late Monday. That’s because Qwest has given MCI until 9:01 p.m. PDT on Monday to change its formal recommendation that shareholders vote for the Verizon deal.

Meanwhile, Qwest said Friday that a survey it commissioned found that holders of more than half of MCI’s shares favored Qwest’s bid even if Verizon was to raise its offer to $25.72 a share. That’s the initial price Verizon agreed to pay for the 13% stake in MCI held by Mexican billionaire Carlos Slim.

Verizon has another option under its agreement with MCI. It could call for a vote of shareholders on its offer alone, though such a vote probably wouldn’t occur until the end of June or early July.

A Verizon-MCI combination would create a global goliath on a par with the entity to be formed by the pending acquisition of AT&T; Corp., the nation’s largest long-distance company, by SBC Communications Inc., the second-largest regional carrier.

Should Qwest win MCI, there would be three major competitors -- the combined Qwest-MCI, Verizon and SBC-AT&T.;

Qwest’s struggle has been to convince MCI’s directors that its bids are superior to the deal that MCI reached with Verizon.

Verizon, with its local network, Verizon Wireless unit and high-speed Internet service, is seen as a much stronger company financially than Qwest -- as well as a better fit for MCI’s national and global network and its big business and government customers.

Though it doesn’t own a wireless unit, Qwest has a more modern long-distance network and contends it can better manage a hodgepodge of MCI networks and would squeeze nearly twice the savings out of a merger than Verizon could.

The latest bid by Qwest is $3.5 billion more than the firm’s own stock market value as of Friday, but it already has lined up $7.25 billion in deal financing.

Qwest shares closed unchanged at $3.42, and Verizon shares gained 75 cents to $35.80, both on the New York Stock Exchange. MCI shares lost 6 cents to $26.53 on Nasdaq.