Qwest Communications has withdrawn from the bidding war for global telco MCI.
Rival Verizon is now free to pursue its lower bid for MCI, which has already been accepted by the MCI board.
MCI preferred the Verizon bid because it saw the company as more financially stable than Qwest, with a better debt and sales ratio. This was particularly important as both bidding companies were offering their shares in addition to cash to make up their offers.
MCI had already accepted Verizon’s offer of $26 (£14) a share for the company at the beginning of the month. Qwest was bidding $30 a share.
While some MCI shareholders expressed disappointment that the higher bid had been taken off the table, MCI said that some of its larger enterprise customers preferred Verizon as a future telecoms supplier.
MCI also said some enterprise customers had inserted clauses in new contracts stipulating they could pull out of deals if they weren’t satisfied with a new owner.