Qwest Ends Pursuit of MCI

Qwest Communications International Inc. Chief Executive Richard Notebaert said Tuesday that the company was no longer interested in acquiring MCI Inc. three weeks after walking away from a takeover battle.

“We’re not looking at MCI; that’s over,” Notebaert said at Qwest’s annual meeting in Denver.

The remarks may stifle speculation that Denver-based Qwest, the fourth-largest U.S. local-telephone carrier, would resume an attempt to wrest MCI from Verizon Communications Inc. MCI directors agreed to an $8.44-billion sale to Verizon, rebuffing multiple higher bids from Qwest, on concerns that customers would depart in the wake of a Qwest acquisition.

Shares of Ashburn, Va.-based MCI fell 32 cents to $25.59 on Nasdaq. Qwest gained 11 cents to $3.78 on the New York Stock Exchange.

U.S. regulators might ask MCI and Verizon, as well as SBC Communications Inc. and AT&T; Corp., which are also combining, to sell some assets as conditions of their mergers.

“That may represent an opportunity for us,” Notebaert said. “We went after MCI because the synergies we thought we would create were real. Now the challenge is the same thing, but we have to do it in parts,” he said.

Separately, Qwest said Craig Slater would step down from its board of directors.

With the departure of Slater, a lieutenant of Qwest’s largest shareholder, Philip Anschutz, the board will be reduced to 10 members, Notebaert said.

Notebaert declined to say why Slater stepped down, calling the decision “personal.”

Shareholders reelected Notebaert with 98% of the vote, Linda Alvarado with 97% and Cannon Harvey with 76%. Institutional Shareholder Services, which recommends proxy voting for institutional investors, recommended that shareholders not vote for Harvey’s reelection because he worked at an Anschutz company and was on Qwest’s nominating committee.