Summary
This 8-K filing from Verizon Communications Inc. (VZ) on May 2, 2005, announces a significant amendment to its Agreement and Plan of Merger with MCI, Inc. The core update revises the consideration offered to MCI shareholders, moving towards a greater cash component. Specifically, the amended agreement outlines a total cash consideration of $5.60 per share (paid as a special cash dividend) and a revised stock exchange ratio, where Verizon will issue at least 0.5743 shares of its common stock for each MCI share. The exact exchange ratio is tied to Verizon's stock price, with a floor of 0.5743 shares. This amendment reflects a shift in the deal terms compared to the original agreement, which offered a lower per-share cash value and a different stock exchange structure. Investors should note that the merger consideration is subject to potential downward adjustments related to MCI's bankruptcy claims and international tax liabilities exceeding $1.775 billion. Verizon has also committed to voting its owned MCI shares in favor of the merger, contingent on the MCI board's continued recommendation.
Key Highlights
- 1Verizon Communications Inc. amended its merger agreement with MCI, Inc. on May 1, 2005.
- 2The revised terms offer MCI shareholders $5.60 per share in cash (as a special dividend) plus stock.
- 3Verizon will issue at least 0.5743 shares of its common stock for each MCI share.
- 4The exact stock exchange ratio is variable, based on Verizon's average stock price over a 20-day period prior to the merger.
- 5The merger consideration is subject to downward adjustments for certain MCI bankruptcy and tax liabilities exceeding $1.775 billion.
- 6Verizon has agreed to vote any MCI shares it owns in favor of the merger, provided MCI's board still recommends it.
- 7The filing includes a press release and references the previously filed Form S-4 proxy statement/prospectus for more details.