Qwest Nears Move To Raise U S West, Frontier Corp. Bids
NEW YORK -- Qwest Communications International Inc. is close to increasing its bids for U S West Inc. and Frontier Corp., according to people close to the situation.</br></br>Although the situation is fluid, Qwest's board is scheduled to meet this morning to consider various options to increase the unsolicited offers it made for U S West, a Denver-based Bell company, and Frontier, a Rochester, N.Y., long-distance company, on June 14.</br></br>To be sure, the board can decide to remain pat. Qwest's bids for the companies were at first financially superior to those made by their original suitor, Global Crossing Ltd. But the value of the bids fell as Qwest's stock dropped as much as 25% last week. The stock of the Denver longdistance company has since rallied back a bit as its chief executive, Joseph P. Nacchio, has sought to explain the reasoning behind his bids to investors. Qwest's shares closed yesterday at $35.3125, down $1.3125, on the Nasdaq Stock Market.</br></br>But in recent days, there has been little difference in the financial value of the bids from Qwest and Global Crossing. Accordingly, the boards of Frontier and U S West have both voted to stick with their original agreements with Global Crossing, having little incentive to go with Qwest.</br></br>Subsequently, the pressure is building for Qwest's Mr. Nacchio to either walk away from his offer or put more money or stock on the table. People close to the situation say that Qwest could increase its offer for one or both companies, or put a collar on the deal that guarantees shareholders of U S West or Frontier a minimum share price. Such a move could ease concerns about Qwest's volatile stock, a factor the U S West board raised when it turned down Qwest's bid late Monday.