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The Association of U S West Retirees
 

 

 

Qwest chunk on the block
Founder Anschutz to get $562 million in "forward sales"
By Greg Griffin, Staff Writer
Denver Post
Thursday, October 12, 2006

Qwest founder Philip Anschutz has sold more than a quarter of his holdings in the Denver-based phone company this week in a complex transaction to be completed in 2010.

It was the latest in a series of such deals Anschutz has entered into in recent months that will cut his ownership in Qwest almost in half within four years.

Anschutz Co., the Denver financier's investment firm, entered into a "forward sales contract" with Credit Suisse for 80 million shares, Anschutz spokesman Jim Monaghan said.  Credit Suisse began marketing 66.2 million of those shares on Tuesday for $8.19 per share.

Anschutz was to receive $562 million under the contract and is entitled to a portion of future stock gains through 2010, according to a filing Wednesday with the Securities and Exchange Commission.

In similar deals in June and July, Anschutz received $357 million for 55 million shares, plus a share of future growth.

Under the forward sales contracts, Anschutz retains ownership and voting rights in the shares until 2009 or 2010.  He also will receive a portion of the growth in the share prices during that time.  "This financial instrument speaks volumes to the company's and Phil's confidence in Qwest and the management," Monaghan said.  Anschutz "will be able to participate in the growth ... out until 2009 to 2010."

Monaghan would not say why Anschutz is entering the sales contracts now.  In recent years, Anschutz has focused on investments in sports, entertainment and cinema.

"Anschutz Co. is an investment company with broad interests and quite a bit of activity.  It's not uncommon to move stock around and make various investments," Monaghan said.

Anschutz is Qwest's largest shareholder, with 16 percent of the stock.  He said in a regulatory filing in late 2003 that he owned 300.4 million Qwest shares, according to Bloomberg.

After 2010, based on his recent sales agreements, Anschutz's holdings would fall to 165.4 million shares, or 9 percent of Qwest stock.

Formerly Qwest's chairman, Anschutz no longer sits on the board of directors.

The Anschutz Family Investment Co., which is controlled by Anschutz Co. but of which Anschutz owns just 1 percent, also has been reducing its holdings in Qwest.  In June, the fund sold call options on 17.2 million shares for $23 million.

Qwest's shares closed Wednesday at $8.19, down 2.15 percent.

Staff writer Greg Griffin can be reached at 303-954-1241 or ggriffin@denverpost.com.

http://www.denverpost.com/business/ci_4478833