Qwest Adds More Juice
June 28, 1999
Further cementing its position as a front runner in the acquisition struggle of U.S. West and Frontier Corp., Qwest Communications last week increased its offer by a significant $5 per share to $68.
Qwest is vying with Global Crossing to buy the other telecom companies, even though Global Crossing had an acquisition agreement first.
Both Qwest and Global Crossing are considered benchmark junk bond names, but both are said to be in need of a merger partner to compete against the likes of SBC, AT&T and Bell Atlantic in the fast-paced telecom arena.
The increased offer comes on the heels of Qwest seeing its stock plunge 25% in the wake of the original announcement that it planned to seek Global Crossing and Frontier.
Some in the market had said that even with the drop, Qwest indeed made better strategic sense than Global Crossing to fit consumers' needs. Qwest proponents said that because the majority of customer calls are either local or domestic long distance, Qwest and U.S. West could better provide those services.
However, at the time, international provider Global Crossing had the higher bid on the table, some others noted, so regardless of the better fit, short-term investors were likely to take that instead.
If Qwest does indeed win this dispute, then some said the market should expect to see some other company buy Global Crossing.