NEW YORK - Verizon Communications said Tuesday that the board of rival US telecoms giant MCI had accepted a sweetened takeover offer worth 7.6 billion dollars, in a rebuff to Qwest Communications.
Verizon said that MCI's directors were to recommend its new offer, a substantial improvement on the 6.75 billion dollars it initially tabled, to their shareholders.
Verizon chief executive Ivan Seidenberg said the two firms would create "a formidable and highly competitive company delivering a full range of mission-critical voice and data products to businesses and government".
"We believe our agreement with MCI represents superior value and is a compelling proposition for MCI's shareholders, customers, employees and creditors," he said in a statement.
The deal would give Verizon, the biggest US telecoms firm, MCI's Internet backbone network as well as its long-distance operations and major customers, including the US government departments of Defense and Homeland Security.
The merger would also involve the loss of about 7,000 jobs in planned efficiency savings.
MCI accepted the first offer from Verizon given in stock and cash on February 14, but Qwest countered with a revised proposal worth some eight billion dollars in cash.
MCI, with its suitor's blessing, said it would examine the Qwest counter-offer to see if it offered better value to shareholders, but reiterated its preference for getting into bed with Verizon.
Under the sweetened deal, Verizon will acquire MCI for 23.10 dollars a share plus a cash dividend of 40 cents a share recently paid by MCI to its shareholders.
The new deal will give MCI shareholders total cash value of 8.35 dollars per share of MCI stock. Verizon said that it had increased the cash portion of the deal by 2.75 dollars a share.
The two companies hope to get clearance from US anti-trust regulators in about a year for their merger, which would keep them a step ahead of the planned combination of SBC Communications and AT and T.
03/29/2005 16:17 GMT