Business & Finance
For the third time, MCI's board of directors said "no" to a buyout bid from Qwest Communications Tuesday, setting the stage for what analysts said would be an almost certain hostile takeover attempt. The move recommits MCI to a $7.5 billion offer from Verizon, even though Qwest's most recent bid is $1.4 billion higher. Qwest, however, said in a statement: "We are confident that our offer is superior, and statements of support from many MCI shareholders indicate that they are in agreement with us. Qwest will allow shareholders to dictate the next steps."
Cablevision Systems Corp. scrambled the picture in the auction of bankrupt Adelphia Corp., offering $16.5 billion for the nation's fifth-largest operator. The bid, while lower than the $17.6 billion being offered jointly by Time Warner Inc. and Comcast Corp., was seen by analysts as giving Adelphia new leverage to demand more for its assets. If accepted, it would more than double Cablevision's subscriber base, which could help protect the latter from becoming a takeover target itself, The Wall Street Journal reported. Cablevision is based in Bethpage, N.Y.
The US Army reached a settlement in its long-running billing dispute with Kellogg Brown & Root (KBR), a subsidiary of Halliburton, the company at the center of controversy over providing support services for troops in Iraq. The Army will pay KBR $1.18 billion for feeding military personnel there and in Kuwait. But it will keep $55 million in payments that had been suspended while billing questions were resolved. Halliburton said the withholding issue, which dates to December 2003, stemmed from "interpretative differences" in its billing practices. Separately, the Army announced it has awarded KBR $8 billion in interim fees for support services.
Environmental activists vowed intense scrutiny of a new proposal to turn thousands of acres of Maine's rugged North Woods into resorts, camp sites, permanent hiking and snowmobiling trails, and other types of development. The plan, filed with the state's Land Use Regulation Commission by Plum Creek Timber Co. Tuesday, also calls for construction of low-income housing in the town of Greenwood, the main gateway to the massive wilderness area for recreation-seekers. The Natural Resources Council of Maine called the proposal "a turning point" and said "We could get 20 more of these things across the North Woods" if Plum Creek wins the OK to proceed with the development. The Seattle company, one of the nation's largest owners of timberland, did not say how much it expected to spend on the project.