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Qwest And Verizon Vie For MCI

With MCI's deadline looming for reviewing Qwest Communications' takeover bid, the latter firm is ready to raise the ante in hopes of derailing Verizon Communications' offer for the long distance company.

At the same time, Verizon's Chairman and CEO Ivan Seidenberg spoke out in testimony before the Senate Judiciary Committee claiming that a Verizon-MCI merger would ensure that a strong competitor to AT&T remains viable. SBC Communications is in the process of acquiring AT&T, the leading long distance and business enterprise company.

In another development, a group of small telecommunications companies has hired Gary Reback--the attorney who pushed the Justice Department to sue Microsoft for antitrust violations--to attempt to halt takeovers of AT&T and MCI. Led by XO Communications, the group said it will take its complaint to governmental regulatory agencies.

The Wall Street Journal reported that Qwest is expected late Wednesday to launch a $26-a-share offer for MCI--$1.8 billion more than Verizon's offer. MCI's board has signaled that it favors merger with Verizon, because it believes the former Baby Bell--the largest telecommunications firm in the country--is a better fit. At the same time, major MCI shareholders have been trying to drum up support for higher and higher bids.

As things stand, the MCI board has indicated that it favors the Verizon bid, but has said it would review sweetened bids from Qwest.

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