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Anschutz to sell 10 million shares of Qwest in 2009
Company founder to get $62.3 million payment Monday
By Jeff Smith
Rocky Mountain News
Saturday, June 24, 2006

Qwest Communications founder Phil Anschutz has signed a private contract to sell around 10 million shares of Qwest stock in 2009 and will receive a payment of $62.3 million Monday as part of the agreement.  The transaction follows on the heels of two option sales this month to undisclosed buyers that brought in $23.1 million.

The latest agreement, called a forward sale contract, represents a tiny fraction of Anschutz's holdings in Qwest.  As of April, Anschutz Co. and the Anschutz Family Investment Co. owned 303 million Qwest shares combined, or 16 percent of the company, currently worth more than $2 billion.

Qwest spokesman Bob Toevs said Friday the company doesn't comment on stockholder transactions, and referred questions to Anschutz officials.

Anschutz Co. spokesman Jim Monaghan said the reason to enter into the transaction was to convert a portion of stock into money.  Anschutz Co. doesn't disclose how it uses proceeds.

"The benefit of this particular instrument is that it allows the (Anschutz) company to realize a large percentage of the stock value today and share in whatever upside there will be through the period" of the contract, Monaghan said.

The contract, signed Wednesday and disclosed Friday in a regulatory filing with the Securities and Exchange Commission, often is employed as a tax-deferral strategy.  The buyer, generally an investment banking firm or other sophisticated investor, wasn't identified.

Under the terms of the contract, Anschutz pledged 10 million shares of Qwest but retains ownership and voting rights in those shares until the settlement date on Oct. 16, 2009.

On that date, the exact exchange of shares will depend on the average price of Qwest stock in the five trading days before.  The 10 million shares is based on a "floor" of $7.597 a share.  Anschutz owes fewer shares if Qwest's stock price rises above that level by the settlement date.

The transactions this month represent the largest since Anschutz sold $179 million of Qwest stock in May 2001, a month before Morgan Stanley analysts raised questions about the Denver telco's accounting.

Although regulators and congressional investigators looked at that 2001 transaction, Anschutz has never been charged with any wrongdoing.  Congressional investigators concluded Anschutz wasn't involved in Qwest's day-to-day operations.

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