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April 6, 2005

MCI rejects Qwest, shareholders not happy


Business

MCI Inc.'s decision on Wednesday to accept Verizon's $7.6 billion bid, citing Verizon Communications Inc.'s better growth prospects and stronger finances, is not going over well with some folks. Bill Miller, chief executive of Legg Mason Capital Management, whose funds own 5.6 million shares of MCI and some other institutional investors said this week they would vote against MCI's deal with Verizon in favor of a higher $9.1 billion takeover bid from Qwest Communications International Inc. MCI's recent decision to side with Verizon for a third time could push Qwest to pursue a hostile bid. Qwest said on Wednesday it was weighing its next move, and had previously hired a proxy firm.

MCI shares gained 1.5 percent in trading on Wednesday, as investors bet on a hostile move from Qwest or a higher price from Verizon, the largest U.S. telecommunications company.

"If the latest Verizon offer is presented to shareholders for approval, we intend to vote against it," Miller said. "We believe the current shareholders of MCI overwhelmingly prefer the Qwest offer and that it provides superior short and long term value."


"MCI's board of directors has chosen to reject what we believe is a superior offer to acquire MCI. The company is currently weighing its options and shareholders will dictate the next steps in this process," the company said.







 

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