Sunday, February 13, 2005

Hit #32

It is official now - Verizon is offering $6.8 billion for MCI, valuing MCI at around $21.3/share. Qwest reportedly has countered with a sweetened offer of $7.2 billion that values MCI at $22.6/share.

The Verizon offer, though lower, is a better one. Any Verizon stock got in exchange is definitely worth keeping.

If Qwest's bid succeeds, there is a bankruptcy not too far down the road. Any Qwest shares obtained in exchange for MCI's are not worth keeping.

With my MCI holdings average cost of $16.7/share, the current Verizon and the new Qwest offers represent premiums of 26% and 35% respectively.


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