Qwest to Buy U S West; Global to Buy Frontier, Person Says
Bloomberg News
July 16, 1999, 7:28 p.m. PT
Qwest to Buy U S West; Global to Buy Frontier, Person Says
Denver, July 16 (Bloomberg) -- Qwest Communications
International Inc. is close to an agreement to buy local phone
company U S West Inc. for $40.5 billion, a person familiar with
the negotiations said.
Global Crossing Ltd., a rival bidder for U S West, is
expected to buy long-distance carrier Frontier Corp. for
$12.9 billion, the person said. The transactions would end a
month-long bidding contest between Qwest and Global Crossing for
the two companies.
The U S West board is meeting tonight and the agreement
could be announced as early as this weekend, the person said.
Under the plan, Qwest, the No. 4 U.S. long-distance company,
would gain 25 million U S West customers in 14 Western states.
Global Crossing, which is building a worldwide undersea fiber
optic network, would get 2 million Frontier customers, a long-
distance U.S. network and an Internet-hosting business.
Philip Anschutz, Qwest founder and owner of a 40 percent
stake in Qwest, and Gary Winnick, Global Crossing founder and
chairman, negotiated the agreement, the person said.
In return for walking away from a purchase agreement with
U S West, Global Crossing will receive $420 million in cash,
capacity on long-distance networks and stock, the person said.
The amount is about half of the break-up fee written into
the original purchase agreement between Global Crossing and
U S West. Global also gains because Qwest will drop its higher
bid for Frontier, allowing the transaction to proceed without
another round of bids, the person said.
All of the companies declined to comment.
Qwest shares, which fell 22 percent since it bid for
Frontier and U S West on June 14, rose 1 1/16 to 35. Global
Crossing, which fell 9.1 percent since the Qwest bid, rose 2 1/8
to 46 1/8. Frontier rose 3/16 to 59 1/8. U S West rose 2 7/16 to
60 1/4. |
