NEW YORK (AP) _ MCI Inc. accepted a sweetened $7.64 billion takeover proposal from Verizon Communications Inc. on Tuesday that raises the price tag by $1 billion, but is still nearly a billion dollars shy of the latest bid for the long-distance phone company from Qwest Communications International Inc.
The new offer from Verizon increases the amount of cash being paid and provides protection against a possible decline in the value of the Verizon shares MCI investors will receive, the companies said in a statement.
Qwest said it will reassess the situation, but reiterated its position that it has submitted a superior offer valuing MCI $8.45 billion, $26 per share,
Verizon has now agreed to pay $23.50 for each MCI share, consisting of Verizon stock worth at least $14.75 and $8.75 in cash. In the original deal reached by Verizon and MCI in mid-February, Verizon was to pay $14.75 in stock and $6 cash for each MCI share.
Both the Verizon and Qwest offers include a 40-cent cash dividend paid by MCI to its shareholders earlier this month, as well as future MCI dividends scheduled to be paid before the proposed deal is completed.
MCI said that in making its determination, its board of directors considered the need for Verizon's size, resources, reputation with customers, and wireless capabilities as key to survival in the telecommunications market.
``MCI's board has been closely and carefully evaluating all of the recent developments,'' Nicholas deB. Katzenbach, MCI's chairman, said in a statement. ``We believe Verizon's substantial increase in its offer, the strength of its competitive position and the financial certainty at close make this offer compelling to our shareholders, customers and employees.''