MCI Takeover Battle: Case analysis questions 1. What are the strengths and weaknesses of Verizon‚ MCI‚ and Qwest? Where are the synergies in the proposed combination? 2. Evaluate the two offers in Exhibit 7. What explains the two structures? In each case‚ what is the value to MCI shareholders? 3. Merger arbitrage (or risk arbitrage) funds speculate on the completion of stock and cash mergers‚ typically buying the target and hedging the risk of the acquirer’s shares accordingly to exchange ratio
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“The MCI Takeover Battle: Verizon versus Qwest” I. STRATEGIC PROFILE This case profiles MCI’s merger debate between Verizon and Qwest in 2005. At this time‚ many other companies are merging due to the industry consolidation‚ therefore forcing MCI to keep up with its competition. MCI was acquired after a bidding war between WorldCom‚ British Telecom and GTE‚ with the winning bid being a $37 billion offer from WorldCom. MCI-WorldCom then acquired many other communication companies excluding Sprint
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its CEO. The company name was changed to LDDS WorldCom in 1995 and later just known as WorldCom. MCI‚ Inc. was a telecommunications company that was headquartered in Ashburn‚ Virginia. This was a result of the merger of WorldCom and MCI Communications. They used the name MCI WorldCom but officially became WorldCom on April 14‚ 2003 “as part of the corporation’s emergence from bankruptcy.” (MCI Inc) MCI had a history of acquiring companies that led to the breakup of the AT & T monopoly. WorldCom on
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Group Case 3: MCI Communications Corp.‚ 1983 Executive Summary Assumptions The following are the assumptions we made through the whole analysis. The predicted revenues from 1983 to 1990 were assumed to follow the pattern in Exhibit 9A‚ despite the uncertainty of the higher access charge and competition increase. The marginal tax rate is 30% during that period. The firm must keep minimal cash balance of $100 million to support its operating activities. However
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For the exclusive use of Y. LI Harvard Business School 9-284-057 Rev. June 1‚ 1998 MCI Communications Corp.‚ 1983 In April 1983 Wayne English‚ chief financial officer of MCI Communications Corp.‚ faced the problem of setting financial policy in an environment characterized by a large potential demand for external funding and great uncertainty concerning MCI’s future. MCI‚ which provided long distance telecommunications services in competition with AT&T‚ had seen its revenues grow from almost nothing
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MCI CASE ANALYSIS: PRESENTED: THURSDAY JUNE 15‚ 2006 MCI CASE ANALYSIS INTRODUCTION MCI is at a critical point in their company history. After going public in 1972 they experienced several years of operating losses. Then in 1974 the FCC ordered MCI ’s largest competitor AT&T to supply interconnection to MCI and the rest of the long distance market. With a more even playing field the opportunities to increase market share and revenue were significant. In order to maximize this opportunity
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Verizon and MCI: A Merger that Promotes Competition August 2005 POLICY STUDY No. 05-1 by Richard E. Wagner Harris Professor of Economics George Mason University; Fairfax‚ VA and Senior Fellow‚ Public Interest Institute Mt. Pleasant‚ IA POLICY STUDY August 2005 No. 05-1 Public Interest Institute Dr. Don Racheter‚ President Verizon and MCI: A Merger that Promotes Competition POLICY STUDIES are published as needed. They are longer‚ analytical articles on important
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Homework #5 1) MCI initially financed its needs through equity issuance. This was done because MCI’s source of revenue was insecure in its infancy‚ and this allowed them to raise capital without being tied down by excessive debt repayments further down the road. To continue raising capital after MCI began posting early profits (particularly to repay short-term bank debt)‚ the company issued convertible preferred stock. This preferred stock was able to attract capital due to its dividend paying
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Before the MCI drill MCI is a practice that was arranged this year under close monitoring from Dubai Women’s College in coordination with Dubai Police rescue‚ college administration‚ faculty staff and Students from DWC they participated by being patients . The event successfully conducted and achieved learning objectives for all students who were involved in effectively. The following is going to explain the whole operations‚ finding and lessons learned out of the practice. In MCI practice I learned
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Question 1 MCI is going to need significant cash in order to undertake the capital investment plans that will allow it to achieve the 20% market share that it desires. The projections call for capital expenditures ranging from $890 mln in 1984 to $2.76 bln in 1987. With an existing cash position of $542 mln‚ MCI can cover its capital expenditures requirements for only a year (1984). Thereafter‚ the financing needs range from $732 mln in 1985 to $1.43 bln in 1987‚ assuming that access charges do
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