What is the value of the proposed acquisition of MCI by Verizon?

The acquisition is structured as a stock and cash transaction. For each share of MCI common stock, Verizon will issue 0.4062 shares of its common stock and pay $1.50 in cash. The total value will depend on Verizon's stock price at the time of closing and the outstanding shares of MCI.

Are there any conditions that could affect the cash portion of the deal?

Yes, the $1.50 per share cash amount is subject to a downward adjustment. This adjustment will occur if certain MCI bankruptcy claims and international tax liabilities exceed $1.725 billion. If the adjustment per share exceeds $1.50, the cash payment will be reduced to zero, and the stock exchange ratio will also be adjusted downwards.

Will MCI shareholders receive any additional cash beyond the per-share payment from Verizon?

Yes, in addition to the cash and stock from Verizon, MCI will declare and pay a special dividend of $4.10 per share, less any dividends declared by MCI between February 14, 2005, and the merger's consummation. This special dividend is expected to be paid shortly after MCI shareholder approval of the merger.

What are the key approvals required for this merger to be completed?

The merger requires several key approvals, including the approval of MCI shareholders, expiration or termination of the Hart-Scott-Rodino waiting period, and other necessary regulatory approvals. Additionally, there must be no laws or orders prohibiting the closing, and representations and warranties must be accurate, with no Material Adverse Effect on either company's business.

VZ 8-K: Material Agreements

Summary

Verizon Communications Inc. has announced a significant development with the execution of a definitive Agreement and Plan of Merger to acquire MCI, Inc. The transaction will be a stock and cash deal, where Verizon will issue approximately 0.4062 shares of its common stock and pay $1.50 in cash for each outstanding share of MCI common stock. This acquisition is subject to customary closing conditions, including MCI shareholder approval, regulatory approvals (such as Hart-Scott-Rodino), and the absence of any material adverse effects or prohibitive legal actions. Investors should note that the per-share cash amount is subject to downward adjustment based on certain MCI bankruptcy claims and international tax liabilities exceeding $1.725 billion.

Key Highlights

1Verizon to acquire MCI in a stock and cash transaction.
2Exchange Ratio: 0.4062 shares of Verizon common stock per MCI share.
3Per Share Cash Payment: $1.50 per MCI share, subject to downward adjustment.
4MCI to pay a special dividend of $4.10 per share (less interim dividends) to its shareholders.
5Acquisition is contingent on MCI shareholder and regulatory approvals.
6Termination fee of $200 million payable by MCI under specific circumstances.
7Verizon will file a registration statement including a proxy statement for MCI shareholders with the SEC.

VERIZON COMMUNICATIONS INC 8-K Report, Material Agreement (Feb 17, 2005)

Summary

Key Highlights

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