-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, URlHrKS0QpytquSwX7bTa5rhWKrSn36VweD/jNVLM8Ougw89t6/+fHi019s1FHl8 OuJlr6QQLby+Fb3ksEqjJQ== 0001047469-05-004049.txt : 20050216 0001047469-05-004049.hdr.sgml : 20050216 20050216144310 ACCESSION NUMBER: 0001047469-05-004049 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050211 ITEM INFORMATION: Other Events FILED AS OF DATE: 20050216 DATE AS OF CHANGE: 20050216 FILER: COMPANY DATA: COMPANY CONFORMED NAME: QWEST COMMUNICATIONS INTERNATIONAL INC CENTRAL INDEX KEY: 0001037949 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 841339282 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15577 FILM NUMBER: 05620481 BUSINESS ADDRESS: STREET 1: 1801 CALIFORNIA ST CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3039921400 MAIL ADDRESS: STREET 1: 1801 CALIFORNIA ST CITY: DENVER STATE: CO ZIP: 80202 FORMER COMPANY: FORMER CONFORMED NAME: QUEST COMMUNICATIONS INTERNATIONAL INC DATE OF NAME CHANGE: 19970416 8-K 1 a2152120z8-k.htm 8-K
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): February 11, 2005

Qwest Communications International Inc.
(Exact Name of Registrant as Specified in Its Charter)



Delaware
(State or Other Jurisdiction
of Incorporation)

 

 

 
001-15577
(Commission File Number)
  84-1339282
(IRS Employer Identification No.)

 

 

 
1801 California Street, Denver, Colorado
(Address of Principal Executive Offices)
  80202
(Zip Code)

 

 

 
(303) 992-1400
(Registrant's Telephone Number, Including Area Code)

 

 

 
N/A
(Former Name or Former Address, if Changed Since Last Report)

        Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 8.01. Other Events.

        On February 11, 2005, Qwest Communications International Inc. ("Qwest") transmitted a letter to the Board of Directors of MCI, Inc. ("MCI") in which it proposed the acquisition of MCI by Qwest. Numerous press reports since February 11 have purported to describe the terms of this proposal. Qwest has determined to provide the information included in this Current Report on Form 8-K in order to eliminate any public confusion regarding the terms of the proposal included in its letter; such terms are attached as Exhibit 99.1 to this Current Report on Form 8-K. Qwest's letter also contained statements as to the superior value of synergies available to MCI shareholders from the Qwest proposal and the significantly less burdensome regulatory approval process in a Qwest-MCI combination as compared to other parties in comparable transactions. Qwest reconfirmed the terms of its proposal in writing to the MCI Board of Directors on the evening of February 13, 2005. A summary of Qwest's proposal is attached as Exhibit 99.2 to this Current Report on Form 8-K.

Forward Looking Statements Warning

        This Current Report on Form 8-K may contain projections and other 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 us with the Securities and Exchange Commission, 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 but not limited to: access line losses due to increased competition, including from technology substitution of our access lines with wireless and cable alternatives; our substantial indebtedness, and our inability to complete any efforts to de-lever our balance sheet through asset sales or other transactions; any adverse outcome of the current investigation by the U.S. Attorney's office in Denver into certain matters relating to us; adverse results of increased review and scrutiny by regulatory authorities, media and others (including any internal analyses) of financial reporting issues and practices or otherwise; rapid and significant changes in technology and markets; any adverse developments in commercial disputes or legal proceedings, including any adverse outcome of current or future legal proceedings related to matters that are the subject of governmental investigations, and, to the extent not covered by insurance, if any, our inability to satisfy any resulting obligations from funds available to us, if any; potential fluctuations in quarterly results; volatility of our stock price; intense competition in the markets in which we compete including the likelihood of certain of our competitors emerging from bankruptcy court protection or otherwise reorganizing their capital structure and competing effectively against us; changes in demand for our products and services; acceleration of the deployment of advanced new services, such as broadband data, wireless and video services, which could require substantial expenditure of financial and other resources in excess of contemplated levels; higher than anticipated employee levels, capital expenditures and operating expenses; adverse changes in the regulatory or legislative environment affecting our business; and changes in the outcome of future events from the assumed outcome included in our significant accounting policies.

        The information contained in this Current Report on Form 8-K is a statement of Qwest's present intention, belief or expectation and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices, the economy in general and Qwest's assumptions. Qwest may change its intention, belief or expectation, at any time and without notice, based upon any changes in such factors, in Qwest's assumptions or otherwise. The cautionary statements contained or referred to in this Current Report on Form 8-K should be considered in connection with any subsequent written or oral forward-looking statements that Qwest or persons acting on its behalf may issue. This Current Report on Form 8-K may include analysts' estimates and other information prepared by third parties for which Qwest assumes no responsibility.

        Qwest undertakes no obligation to review or confirm analysts' expectations or estimates or to release publicly any revisions to any forward-looking statements or other statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

        By including any information in this Current Report on Form 8-K, Qwest does not necessarily acknowledge that disclosure of such information is required by applicable law or that the information is material.

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SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, Qwest has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


 

 

 

 

QWEST COMMUNICATIONS INTERNATIONAL INC.

DATE:

 

February 16, 2005


 

By:

 

/s/  
STEPHEN E. BRILZ      
        Name:   Stephen E. Brilz
        Title:   Assistant Secretary

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EXHIBIT INDEX

Exhibit No.

  Description
Exhibit 99.1   Terms of proposal in Letter, dated February 11, 2005, from Qwest Communications International Inc., to the Board of Directors of MCI, Inc.

Exhibit 99.2

 

Summary of Proposal for Acquisition of MCI, Inc. by Qwest Communications International Inc.

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SIGNATURES
EXHIBIT INDEX
EX-99.1 2 a2152120zex-99_1.htm EX-99.1
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Exhibit 99.1


Summary of Proposed Cash and Stock Transaction Terms

Consideration:   Qwest common stock with a cash component to MCI

Value:

 

$23.00 per share consideration to MCI shareholders comprised of $7.50 in cash and $15.50 of Qwest common stock based on a fixed exchange ratio of 3.735 Qwest shares per MCI share.
 
In addition, MCI shareholders to receive $0.40 in quarterly dividends per MCI share for the 4 quarters anticipated between signing and closing.
 
Pro forma ownership split of 40.0% MCI/60.0% Qwest.

Form of Exchange Ratio:

 

Fixed exchange ratio, no collar, cap, floors or other 'banding' mechanisms.
  
Exchange ratio based on Qwest closing price of $4.15 on February 11, 2005, and MCI offer price adjusted for $7.50 cash consideration per MCI share to be paid to MCI shareholders.
 
MCI shareholders participate in upside of Qwest stock and substantial synergies from day of announcement.

Definitive Agreement:

 

The Merger Agreement will contain representations, warranties, covenants, closing conditions and other terms as are customary for transactions of this type, including closing conditions regarding shareholder approval, no material adverse change in MCI, receipt of regulatory approvals, accuracy of representations and warranties, compliance with covenants, and no governmental injunction.
 
The Merger Agreement will not have a financing condition.

Example of Overall Value Received by MCI Shareholders:

 

For clarity, given the above and assuming a February 28, 2006 closing, MCI shareholders would receive between signing and closing:
  
        •         Approximately $1.60 in cash (over 4 quarters) per MCI share; and
        •         Approximately $7.50 in cash per MCI share; and
        •         3.735 Qwest shares per MCI share.
 
In addition, MCI shareholders receive substantial participation in value of synergies post-closing.

No Solicitation/Superior Proposal:   The Merger Agreement will contain an appropriate non-solicitation provision, which would allow MCI's board the ability to change its recommendation in favor of the Qwest transaction prior to the MCI shareholder vote in the event of a Superior Proposal that Qwest does not match.
  
In the event of a Superior Proposal, Qwest will be entitled to a customary break up fee and reasonable and documented out of pocket expenses.

Regulatory:

 

Qwest and its regulatory advisors are highly confident that all necessary regulatory approvals can be obtained within a ten to twelve month time frame and would not require actions (e.g., divestitures) material to the underlying business case for the transaction. Qwest and MCI will agree in the Merger Agreement to use reasonable best efforts to obtain all necessary regulatory approvals, which will include taking any remedial actions other than those having a material adverse change on the combined entity.

Expected Timing:

 

Closing will occur after all regulatory approvals are obtained, which is anticipated to be ten to twelve months after signing.

Drop Dead Date:

 

The Merger Agreement will have an outside termination date of ten months unless regulatory approvals are not yet satisfied, in which case the outside termination date can be extended by either party for 60-day increments up to a maximum of 14 months from the signing date.

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Summary of Proposed Cash and Stock Transaction Terms
EX-99.2 3 a2152120zex-99_2.htm EX-99.2
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Exhibit 99.2

Consideration


(In millions except for per share data)

  Per Share
  Aggregate
 
Effective Value to MCI Shareholders   $ 24.60   $ 7,997  
Less: Quarterly Dividends   $ (1.60 ) $ (520 )
  Cash Merger Consideration   $ (7.50 ) $ (2,438 )
   
 
 
Qwest Stock to Be Issued   $ 15.50   $ 5,039  
Qwest Stock Price @2/11/05   $ 4.15        
Exchange Ratio           3.735  
Qwest Shares to be Issued           1,214  
% of Pro Forma Outstanding Qwest Shares           40 %



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