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

To: stockid who wrote (4510)	7/7/1999 4:31:00 PM
From: Henri	Read Replies (1) \| Respond to of 6846

Qwest talks with U.S. West and Frontier progress... biz.yahoo.com

To: stockid who wrote (4510)	7/7/1999 9:13:00 PM
From: Nick	Read Replies (1) \| Respond to of 6846

Qwest Seen Buying U S West, While Global Crossing Gets Frontier Bloomberg News July 7, 1999, 3:32 p.m. PT Qwest Seen Buying U S West, While Global Crossing Gets Frontier Denver, July 7 (Bloomberg) -- The competition between Global Crossing Ltd. and Qwest Communications International Inc. to buy U.S. West Inc. and Frontier Corp. could well result in a draw, with the rival bidders splitting the spoils, analysts said. Qwest will likely win the battle for U S West and Global Crossing will come away with Frontier as a result of regulatory, management and stock issues, analysts said. ''That scenario works out to the benefit of everybody,'' said Tom Burnett, president of New York-based Merger Insight, which tracks mergers and acquisitions. ''Global Crossing gets a big breakup fee and Qwest gets a major company with 25 million customers in 14 states.'' Global Crossing, a two-year old phone company that's building an undersea network, agreed in May to buy U S West for $33.9 billion and Frontier Corp. for $12.9 billion. Qwest, the No. 4 U.S. long-distance phone company, in turn offered $69 a share, or $40.5 billion, for U S West and $68 a share, or $13.8 billion, for Frontier. Talks are ongoing and still face hurdles. For instance, U S West wants to merge with Qwest as an equal, not agree to a takeover proposed by the smaller phone company, people familiar with the talks said. Global Crossing and Qwest declined to comment, while U S West and Frontier officials weren't available. Analysts cited several reasons why they expect Global Crossing to end up with Frontier and Qwest to get U S West. Under terms of their agreement, if U S West accepts a buyout offer from another company, money-losing Global Crossing will receive an $850 million breakup fee that it could use to pay for its network. Regulatory Hurdles A Global Crossing purchase of Frontier could be completed by year end, months ahead of any U S West purchase, because it's not expected to face a tough regulatory review, analysts said. Global Crossing needs a nationwide U.S. network to complement its undersea network. Frontier has a coast-to-coast network, while U S West is a regional company. In addition, some investors don't like Global Crossing's offer for U S West because it involves a special stock issue and would result in co-chief executives. ''Global's offering for Frontier doesn't involve tracking stocks and management issues that we have with U S West,'' Burnett said. A purchase of Frontier by Global ''can be done quickly and close the by end of October,'' he said. Under Global Crossing's agreement with U S West, it must succeed in buying Frontier first or their merger is voided. Qwest's offer carries no such contingency. Qwest needs a local U.S. phone network to lower the costs that it pays other carriers to complete its calls. U S West's network spans 14 western states. Qwest persuaded U S West to engage in talks Thursday after raising its offer. Global Crossing, based in Hamilton, Bermuda, plans to file a proxy statement for the Frontier transaction with the Securities and Exchange Commission as soon as today. Tracking Stock Under the U S West-Global Crossing agreement, shareholders of each would own 50 percent of the combined company. The new entity would issue two separate stocks, one to track its long- distance and Internet units, and another for the local phone business. In addition, Global Crossing Chief Executive Robert Annunziata and U S West Chairman Solomon Trujillo would run the company as co-chief executives. The combined company's 22-member board would have 10 directors appointed by Global Crossing, 10 designated by Denver-based U S West and two chosen by mutual agreement. The company would set up new headquarters to New York.