Reuters is reporting that MCI has received a $6 billion takeover bid from Qwest Communications International and is also talking to Verizon Communications. Qwest has a market capitalization of around $7.7 billion is one of the weakest bells, with over $17.2 billion in debt. The reason Qwest would want MCI is for its $5.6 billion in cash, and carry forward losses. According to Wall Street Journal, the talks between Qwest and MCI have been going on for a long time, and in recent days the two companies have been talking about price and structure. “This would be a major coup for Qwest, but I don’t believe this is the deal MCI’s shareholders are looking for,” says Ben Silverman, contributing editor/telecom analyst for investment newsletter, FindProfit.com. I have to level with you guys, this one has left me scratching my head, and cannot see the merit of the deal. I think Qwest might be on slippery slope here!
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