Verizon Communications Inc. has agreed with MCI, Inc. to further amend the terms of the Feb. 14, 2005 agreement to acquire MCI. As with the original offer and the revised bid of March 29, the MCI Board of Directors is unanimously recommending approval of the amended agreement to its shareholders.
Under the amended agreement, each MCI share will be exchanged for cash and stock worth at least $26.00, consisting of cash of $5.60 expected to be paid promptly upon approval of the transaction by MCI's shareholders plus the greater of 0.5743 Verizon shares for every share of MCI Common Stock or a sufficient number of Verizon shares to deliver $20.40 of value. Under this price protection feature, Verizon may elect to pay additional cash instead of issuing additional shares over the 0.5743 exchange ratio.
The transaction requires approval by MCI shareholders, and regulatory approvals, which the companies are targeting to obtain in about a year. The proxy statement is currently under review by the SEC, and both Verizon and MCI look forward to a shareholder vote this summer.