US carrier Qwest today launched a hostile takeover bid for regional carrier US West and service provider Frontier, threatening the planned acquisition of the two telcos by Global Crossing.
Qwest has offered $51 billion in cash and equity and $11.4 billion in assumed debt for fellow Denver, Colorado telco US West and New York based Frontier. The combined operation would have a market capitalisation of $87 billion.
In May, Global Crossing announced that it would merge with US West and Frontier, creating a $75 billion company. But analysts at the time doubted the benefits of merging a regional telco with an international carrier.
Frontier was first to react, saying it is reviewing the offer and will discuss the proposal with its advisors. "Frontier currently is party to an agreement and plan of merger with Global Crossing, Any action taken will be consistent with the company's obligations under that agreement," it said in a statement.
Qwest operates a large circuit switched network in the US and operates in Europe through its joint venture with Dutch telco KPN. Qwest recently acquired BT's UK managing director Afshin Mohebbi, who now serves as its president and chief operating officer.
Qwest said today's proposal would enable it to deliver broadband services to 31 million consumers and businesses in the US.
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