AUSWR
The Association of U S West Retirees
 

 

 

Qwest Considers Acquiring Firms Outside Telecom
By Dionne Searcey
The Wall Street Journal
Tuesday, February 28, 2006

NEW YORK -- Nearly a year after losing a bruising battle to overtake MCI Inc., Qwest Communications International Inc. is contemplating possible acquisitions that could include targets outside of the telecommunications industry.

Qwest Chief Executive Richard Notebaert said he might consider acquiring, for example, an information-technology firm or a company that hosts Web sites for corporations.  Those types of acquisitions could help Qwest, of Denver, sell more services to businesses, he said yesterday.  Mr. Notebaert's speculations about acquisitions included not ruling out a cable company.

When trying to calculate Qwest's future moves, investors and analysts "probably think of traditional [telecom] companies but we might look to either side of that," Mr. Notebaert said in an interview.

At the same time, he said, "We aren't going out on some buying binge."  Any deal, he said, "would have to be strategically complementary."

Mr. Notebaert has often said the company would consider acquisitions if the price was right.  He said as much again yesterday, noting that Qwest can afford to be patient and disciplined.

Qwest lost a bitter takeover fight with Verizon Communications Inc. for MCI last year.  Yesterday, Mr. Notebaert said he would not be averse to pursuing another type of mega deal in the future.

Qwest is recovering from an accounting scandal several years ago that forced it to restate billions of dollars of revenue.  It has taken steps to improve its financial condition, recently re-engineering its $15.5 billion debt load.  Mr. Notebaert has said the company could turn profitable in 2006.

Write to Dionne Searcey at dionne.searcey@wsj.com

http://online.wsj.com/article/SB114108498081884713-search.html?KEYWORDS=Qwest&COLLECTION=wsjie/6month