Verizon is buying about 43.4 million shares of MCI common stock from eight entities affiliated with Carlos Slim Helu for $25.72 per share in cash.
Under the agreement, Verizon will pay the Slim entities an adjustment at the end of one year in an amount per MCI share equal to 0.7241 times the amount by which the price of Verizon’s common stock exceeds $35.52 per share (measured over a 20-day period). The prices for the MCI and Verizon shares were set by Verizon and the Slim entities based upon the market prices for the stocks at the time of the agreement.
According to an article from The Register,
“The 13 per cent stake cost Verizon slightly more than it is offering other MCI shareholders. By buying such a large slice of the firm Verizon makes it very difficult for Qwest to get back in the bidding.
But Qwest isn’t quitting yet and the firm may launch a hostile takeover. Qwest criticised the deal for creating two classes of shareholders – Carlos Slim was paid more for his shares than other shareholders are being offered.”
Verizon Chairman and CEO Ivan Seidenberg said, “While this was an opportunity for us to purchase a block of shares under unique circumstances and is an important step forward in our acquisition of MCI, we will continue to assess the situation as we move toward a vote by the MCI shareholders.”
The purchase, which is subject to regulatory approvals, is expected to close in several weeks.
murdok | Breaking eBusiness News
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