Thursday, February 03, 2005

MCI gone too ?

I have mentioned it a few times already, but now the takeover talks seem to have turned official. Qwest is reported to be in talks to buy MCI (MCIP). The offer is expected to be at market price or at a very small premium.

Given that the shares are trading today at around $20, this represents close to a 20% premium over my average cost of $16.7/share.

But, this deal is undesirable. Qwest is itself in a bad shape, both financially, with huge debt levels and operationally with no clear winning strategy to compete against the rest. If anything, I was expecting Qwest to sell itself!

Even if this deal goes through, this is no consolation for millions of former Worldcom shareholders whose holdings were destroyed when it applied for bankruptcy protection last year. MCI, if ofcourse, the post-bankruptcy incarnation of Worldcom. Will those shareholders ever get justice ? In their lifetimes ? Will the people behind this multi-billion wealth destruction ever get punished ?


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