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Technology Stocks : Qwest Communications (Q) (formerly QWST) -- Ignore unavailable to you. Want to Upgrade?

To: debra vogt who wrote (4338)	6/23/1999 4:24:00 PM
From: MangoBoy	Read Replies (1) \| Respond to of 6846

Here's what I think might have happened: USW + QWST has been rumored for a long time, going back at least a year to when USW started offering QWST LD to its customer base. QWST has been on a roll in the last year with its stock doubling since January and getting a strong vote of confidence from BLS. QWST has struck deals with MSFT, ORCL, SAP, Siebel, and now KPMG. QWST's plan was to bid for USW upon the completion of the national fiber network (end of this month). QWST's assets would be in full bloom, the stock would be at its high, and QWST would be poised to absorb the blow of paying for USW. The problem is that everyone knew this was coming and took advantage. USW's Trujillo, who finally made it to Chairman just a few months ago, wanted two things: as high a price from QWST as possible and a role for himself at the top (or big bucks to go away). So.. Trujillo contacts Winnick and negotiates the GBLX offer, which was probably around what QWST intended to bid in the first place. GBLX wants USW for the same reason QWST does. What does GBLX get? At a minimum the $850M breakup fee, a chance to sell a lot of shares at top dollar, and maybe USW. Trujillo now has a "bird in the hand": He has a bid as good as what QWST was likely to offer, and he has a big (though perhaps tenuous) role for himself as "Co-CEO" of GBLX/FRO/USW. Now QWST is put in the position of having to counterbid. USW wins because it will fetch a price at least as good as what QWST would have offered. Trujillo wins because he (deservedly) looks like a hero to USW shareholders and gets a lucrative job for himself or a sweet "golden parachute". GBLX wins because they get either USW or some hefty consolation prizes. QWST gets screwed and has to overpay. Nacchio underestimated Trujillo or overvalued their personal friendship or both. Mark