-- U S WEST Shareholders to Receive $69 in QwestStock for Each U S WEST Share --
-- Revised Offers Provide U S WEST and FrontierShareholders with Greater Certainty as to Value --
DENVER, June 23, 1999 ? Qwest Communications International Inc. (Nasdaq: QWST) today announced that it has increased its offers to acquire U S WEST, Inc. (NYSE: USW) and Frontier Corporation (NYSE: FRO). Qwest is offering to acquire each U S WEST share for $69.00 in Qwest stock, and to acquire each Frontier share for $20.00 in cash and $48.00 in Qwest stock.
?We have revised our offers in order to be fully responsive to the issues raised by the Boards of Directors of U S WEST and Frontier,? said Qwest Chairman and CEO Joseph P. Nacchio. ?We encourage the Boards of the two companies to take all actions necessary to enter into discussions with Qwest regarding these superior offers, which are clearly in the best interests of their respective shareholders, customers and employees.
?In revising these offers, we also have protected the interests of Qwest?s existing shareholders,? continued Mr. Nacchio. ?Because we are prepared to use cash to guarantee the value of these proposals, we are not required to issue a number of shares greater than that contemplated under our original offers. In fact, if Qwest?s share price increases above $38.70, we would actually issue fewer shares in completing the U S WEST offer, and if Qwest?s share price increases above $39.15, we would issue fewer shares in completing the Frontier offer.?
The revised offers were communicated in separate letters sent today by Mr. Nacchio to U S WEST Chairman, President and CEO Solomon D. Trujillo and to Frontier CEO Joseph P. Clayton. Neither proposal is conditioned upon acceptance of the other proposal. The full texts of the two letters are attached to this press release.
The Revised Offer for Frontier
Under its revised proposal, Qwest will deliver cash and Qwest common stock having a value of $68.00 for each share of Frontier common stock consisting of $20.00 in cash and the balance in Qwest common stock. At the closing price on Tuesday, June 22, 1999 the exchange ratio represented by Qwest?s offer is 1.359.
Qwest?s revised offer is subject to a collar on the price of Qwest stock between $30.50 and $43.50. Qwest will protect the Frontier shareholders? value by paying more cash or issuing additional shares (at Qwest?s option) to offset any decline in Qwest stock price down to $30.50 per share. Frontier shareholders will realize all of the upside of any increases in the Qwest stock price above this collar.
Qwest?s revised offer represents a $5.00 per share (8%) premium to the value of Frontier?s proposed merger with Global Crossing based on the closing price of Global Crossing?s shares on June 22, and a 17.2% premium to the closing price of Frontier on June 22.
The Revised Offer for U S WEST
Under its revised proposal, Qwest will deliver Qwest common stock having a value of $69.00 for each share of U S WEST common stock. Based on the closing price for Qwest common stock on June 22, the exchange ratio represented by Qwest?s offer is 1.954.
Qwest?s offer is subject to a collar on the price of Qwest stock between $30.50 and $43.50. Qwest will protect the U S WEST shareholders? value by paying more cash or issuing additional shares (at Qwest?s option) to offset any decline in Qwest stock price down to $30.50 per share. U S WEST shareholders will realize all of the upside of any increases in the Qwest stock price above this collar. Qwest is confident that, if it were to fund with borrowings the cash payments required to offset any decline in Qwest?s stock price, the combined company would enjoy an investment grade rating on its debt.
Qwest?s revised offer represents a $7.86 per share (12.9%) premium to the value of U S WEST?s proposed merger with Global Crossing based on the closing price of Global Crossing?s shares on June 22, and a $12.00 per share (21.1%) premium to the closing price of U S WEST on June 22.
The stock portions of Qwest?s offers continue to be tax-free to shareholders of Frontier and U S WEST and Qwest is confident that it is capable of consummating this transaction at least as expeditiously as Global Crossing.
?Our increased offers for U S WEST and Frontier are obviously superior to the existing proposals from Global Crossing,? said Mr. Nacchio. ?As we have emphasized since our announcement last week, the Qwest stock is stronger and more liquid than the Global Crossing stock, Qwest offers greater realizable synergies and upside potential than Global Crossing does, and Qwest offers the benefits of a true, integrated merger without the use of a complex, divisive tracking stock.?
Qwest Communications International Inc. (Nasdaq: QWST) is a leader in reliable and secure broadband Internet-based data, voice and image communications for businesses and consumers. Headquartered in Denver, Qwest has more than 8,500 employees working in North America, Europe and Mexico. The Qwest Macro Capacity® Fiber Network, designed with the newest optical networking, spans more than 18,500 route miles in the United States, with an additional 315-mile network route to be completed by the end of the year. In addition, Qwest and KPN, the Dutch telecommunications company, have formed a venture to build and operate a high-capacity European fiber optic, Internet Protocol-based network that has 2,100 miles and will span 9,100 miles when it is completed in 2001. Qwest also has nearly completed a 1,400-mile network in Mexico. For more information, please visit the Qwest web site at www.qwest.com.
This release and the attachments may contain forward-looking statements that involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to the documents filed by Qwest with the SEC, specifically the most recent reports which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including potential fluctuations in quarterly results, dependence on new product development, rapid technological and market change, failure to complete the network on schedule and on budget, financial risk management and future growth subject to risks, Qwest's ability to achieve Year 2000 compliance, and adverse changes in the regulatory or legislative environment. This release and the attachments include analysts' estimates and other information prepared by third parties for which Qwest assumes no responsibility. In addition, certain statements regarding synergies and other projections and information contained in this release and the attachments are based on publicly available information regarding U S WEST and Frontier. Qwest undertakes no obligation to review or confirm analysts' expectations or estimates or such publicly available information or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
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