buoys Qwest stock
Proposed AT&T-BellSouth deal stirs interest in company's
prospects. Qwest could court phone companies outside its
region, experts say. Meanwhile, Verizon states it won't
By Beth Potter, Staff Writer
Tuesday, March 7, 2006
Qwest's stock hit a nearly
four-year high Monday, up 3.8 percent after AT&T's
announcement Sunday that it plans to buy BellSouth for more
than $67 billion.
Oren Shaffer, Qwest's chief financial officer, told
investors at a Florida conference Monday that Qwest is
trying to make its business as valuable as possible - and
looking to buy a company that will help it grow.
"Let's continue to look at these, any acquisition
opportunities that might come up," Shaffer said. "They have
to be obviously very value-accretive, and we just as
obviously don't seem to have cracked the puzzle, because we
have been looking and we haven't done anything yet."
Along with chief executive Richard Notebaert, Shaffer has
been instrumental in bringing the 14-state telephone company
back from near bankruptcy in 2002, when its stock traded at
a little more than $1 per share. Qwest stock closed at $6.84
Financial message boards on the Internet lit up with
speculation about Qwest. "We're going to $10 and beyond,"
wrote one commentator.
But it is unclear what company, if any, Qwest might partner
with in an industry of consolidating giants. Qwest's market
capitalization is $12.8 billion, compared with $93 billion
for Verizon and a projected $167 billion for a combined
Qwest could make a play for phone companies outside of its
14-state region, said Bank of America analyst David Barden.
Other analysts have pointed to the spinoffs of local-phone
units from Sprint Nextel Corp. and Alltel Corp. as possible
Qwest acquisition targets.
Verizon tried to lay rumors to rest Monday that it would
make a good Qwest suitor.
"Verizon's business plan remains unchanged, so we remain
focused on integrating MCI and divesting our directories
business," said spokesman Bill Kula.
Verizon also is seeking to buy the remaining 45 percent of
its wireless company that is owned by Vodafone.
Qwest could lose out in an AT&T-BellSouth deal. Qwest sells
part of its network to BellSouth, which would likely
transfer that traffic to AT&T, said UBS Bank analyst John
If the AT&T-BellSouth deal goes through, Qwest would lose
about $200 million a year from BellSouth, or about 5 percent
of its total wholesale revenue, he said. "It could put a
dent in Qwest's wholesale-revenue stream," he said.
Staff writer Beth Potter
can be reached at 303-820-1503 or