Verizon Communications let a Friday-midnight deadline pass on increasing its bid for MCI Inc., and issued no word Saturday on what -- if anything -- it might do next to try to block rival Qwest Communications International from winning the bidding war.
In February, Verizon and MCI agreed to merge. But in the following weeks, Qwest repeatedly raised its offer, and last week MCI's board declared Qwest's offer of $9.74 billion superior to Verizon's bid of $7.65 billion.
Under the terms of its original merger agreement, Verizon had five days, ending midnight Friday, to make a counteroffer. With that deadline expired, MCI's board of directors now has until midnight Monday to recommend the Qwest deal to its shareholders if no counterproposal is made.
Verizon could increase its offer by that deadline, or it could wait even longer and take a higher bid directly to MCI shareholders. Verizon has already filed the necessary paperwork with the Securities and Exchange Commission and has the right to require MCI to hold a shareholder vote on its deal, even if MCI's board decides to pursue Qwest's offer.
If Verizon decides to walk away from the deal, it could collect $250 million in breakup-related fees.
Qwest on Friday said its proxy adviser had determined that holders of more than 50 percent of MCI's shares support Qwest's proposed $30-per-share deal. Moreover, the shareholders would continue to support that deal, even if Verizon raises its bid to $25.72 per share, which is the amount Verizon recently agreed to pay to acquire a 13.4 percent stake in MCI from its largest shareholder, Carlos Slim Helu.