=DJ Qwest Commun CEO: Co. Has No Buyout Offer On Table
NEW YORK (Dow Jones)--Qwest Communications International Inc. (QWST) isn't
talking to any potential merger partners and has no buyout offers on the
table, Chief Executive Joseph P. Nacchio said Friday.
Speculation has swirled in recent days that Qwest, along with Global
Crossings Ltd. (GBLX), could be the next big prey in the telecommunications
merger hunt. Earlier this week, MCI Worldcom Inc. (WCOM) won Sprint Corp.
(FON) away from rival suitor BellSouth Corp. (BLS) with a $115 billion
offer, the biggest ever.
Qwest will surely bid on any assets MCI Worldcom or Sprint might have to
sell in order to win regulatory approval for the deal, Nacchio told Dow
Jones in an interview after a speech at the Internet World Convention here.
The merger of the second- and third-largest long-distance carriers will
create a "classic duopoly" between the combined company and first-ranked
AT&T Corp. (T), Nacchio said.
As the biggest companies in telecommunications sew up mergers that make
themselves even bigger, size become ever more critical.
"It would be foolish for me to say that we are big enough," Nacchio said.
"There's obviously been a lot of speculation," he said during his speech,
"Last week everybody was shorting us, this week everybody is buying calls."
Rumors notwithstanding, Nacchio said there is no deal in the works now and
he couldn't enter talks if he wanted to because of the company's planned
acquisition of U.S. West Inc. (USW).
If a potential acquirer is interested, it will have to come forward with a
formal offer, Nacchio said. "I'll be the last to know."
Any deal proposal is most likely to come in the next few weeks, before the
first shareholder vote on the U.S. West deal, he said.
Speculation about who might buy Qwest has focused on BellSouth, which
already has a big stake in the company and lost the fight for Sprint.
Germany's Deutsche Telekom AG (DT) also has been mentioned as a logical
buyer.
"I don't know what's going to happen." Nacchio said. "The next four weeks
could be interesting."
Nacchio said he met Wednesday with BellSouth Chairman and Chief Executive
Duane Ackerman, but stressed that the meeting was a routine scheduled
session springing from the companies' existing relationship.
Nacchio said the long wait before several major industry deals close gives
Qwest a little time to assess its strategic position, but other remarks he
made stress the importance of looking ahead and moving very quickly.
One thing the company isn't in any immediate rush to acquire is a wireless
business.
"Our hands are full." Nachio said, but he added that wireless is
interesting.
Qwest currently is bringing in revenue at a rate of about $4 billion a
year.
Analysts are expecting revenue of $3.6 billion to $3.7 billion this year,
an estimate with which Nacchio said he is comfortable.
He declined to comment directly on third-quarter results, which the company
will report later this month, but he said he probably wouldn't be as
publicly bullish as he was Friday if he were worried about meeting financial
targets.
Analysts surveyed by First Call/Thomson Financial see Qwest reporting
third-quarter earnings of 3 cents a share, compared with a year-earlier
1-cent loss, as adjusted for a stock split.
- Shawn Young, Dow Jones Newswires, 201-938-5248
(END) DOW JONES NEWS 10-08-99
11:42 AM |
