ROCHESTER, N.Y.-Frontier Corp.’s board of directors last week decided not to act on an unsolicited bid made by Qwest Communications International Inc. to buy the company, electing instead to move forward with its merger agreement with Global Crossing Ltd.
Frontier’s board said it would continue to monitor events related to Qwest’s proposal.
Qwest earlier in the week made bids for Frontier and U S West Inc., both of which forged merger agreements with Global Crossing. The proposals added up to an offer of $55 billion in cash and equity plus the assumption of $11.4 billion in debt.
Following the announcement, however, Qwest’s stock fell 23 percent, or $10.75, to close at $34.13 June 14, weakening its offers for the companies. The company’s stock recovered slightly and was trading around $37.75 midday Friday.
Frontier cited uncertainties surrounding Qwest’s simultaneous bid for U S West, the financial terms and structure of Qwest’s proposal, market conditions and terms of its agreement with Global Crossing as reasons for its inaction on the bid.
“Our board discussed the Qwest offer, its impact on shareholders, and its interplay with the separate Qwest offer to acquire U S West,” said Joseph P. Clayton, Frontier’s chief executive officer. “The current circumstances surrounding the Qwest proposal do not warrant any change at this time in our current initiatives that are designed to move Frontier’s transaction with Global Crossing toward a prompt closing.”
