MCI and Qwest Discussing Possible Merger

    February 3, 2005

MCI Qwest Communications International are supposedly in talks about a $6.3 billion merger.

Some believe this to be a ruse to get other companies such as Verizon or BellSouth to enter a bidding war.

“This is a good way for him (MCI Chief Executive Michael Capellas) to make sure MCI is in play and force Verizon and BellSouth to make a decision,” says Rich Nespola, CEO of TMNG.

MCI and Qwest, both tainted by scandal in the collapse of the telecom bubble, are far enough along to discuss details like price and structure of a potential takeover by Qwest, but the deal could still break down, according to Thursday’s edition of the Wall Street Journal.

MCI, which changed its name from WorldCom when it emerged from bankruptcy nearly a year ago, declined comment on the reports, which come just days after AT&T Corp. agreed to be acquired by SBC Communications Inc. for $16 billion in stock and cash.”

A merger between MCI and Qwest would make the 5th multibillion-dollar telecommunications deal to be done since October.

“It’s in Qwest’s interest to be aggressive,” said UBS Securities analyst Robert Hopper.

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