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Monday April 11, 08:35
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Bidding war for MCI gets block strategy
(by Natali Novak)
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Verizon Communications Inc. offers $1.1 billion for a 13.4 % stake in MCI Inc. it wants to buy directly from the company’s largest stockholder, the Ashburn held by Mexican telecom magnate Carlos Slim Helu.
"While this was an opportunity for us to purchase a block of shares under unique circumstances and is an important step forward in our acquisition of MCI, we will continue to assess the situation as we move toward a vote by the MCI shareholders," Verizon Chief Executive Officer Ivan Seidenberg said.
Meanwhile, Bill Miller, the CEO of Legg Mason Capital Management expressed his disagreement over such a deal with Verizon. In a letter to MCI’s Chief Executive Michael Capellas, released late on Saturday, he stated that all other MCI’s shareholders are entitled to enjoy the same value as that received by Slim. He also argued that the value should be higher than the $25.72 per share in cash offered to Slim.
The support of Legg Mason Inc., a major Qwest shareholder, creates a strange situation when shareholders are divided between different blocks.
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