Qwest Communications Increases Offer to $68 per Share in Battle for U.S. West and Frontier Corp.

Qwest Communications has strengthened its position in the acquisition struggle for U.S. West and Frontier Corp. by increasing its offer to $68 per share, a $5 increase from its initial bid. This move comes amidst competition with Global Crossing, which had initially secured an acquisition agreement. The telecom industry is witnessing a rapid pace of consolidation, with Qwest and Global Crossing competing to pair with other major players like SBC, AT&T, and Bell Atlantic.

Key Takeaways:

• Qwest Communications has raised its offer for U.S. West and Frontier Corp. to $68 per share, a $5 increase from its initial bid.
• The increased offer is a direct response to seeing its stock plunge 25% following the initial announcement of its plan to seek U.S. West and Frontier.
• Qwest proponents argue that the company can better provide local and domestic long-distance services, which account for the majority of customer calls.
• Some market analysts believe that Qwest's increased offer addresses the concerns that Global Crossing had a better bid initially.
• If Qwest succeeds in acquiring U.S. West and Frontier Corp., the market may expect another company to buy Global Crossing due to Qwest's stronger strategic fit.
• Qwest and Global Crossing are considered benchmark junk bond names, both in need of a merger partner to compete effectively in the telecom arena.

Statistics:

• The initial bid by Qwest Communications was increased by $5 per share, reaching $68.
• Qwest's stock price plummeted 25% following the initial announcement of its plan to seek U.S. West and Frontier Corp.
• The majority of customer calls are either local or domestic long distance, accounting for the strategic advantage of Qwest's offer.
• Global Crossing had initially secured an acquisition agreement for U.S. West and Frontier Corp. yet faces increased competition from Qwest.

Sources:

• Bloomberg Press
• Wall Street Journal
• Reuters