Verizon buys out critic

Verizon has silenced one of its strongest critics among MCI's shareholders by purchasing his stock at a premium. The telecom giant bought the 43.4 million shares owned by Carlos Slim Helu and affiliated entities for $25.72 a share.

Verizon's offer for the remaining shares is $23.50 per share. The sale requires regulatory approval because of its size, Verizon said, but that is expected to take a few months. Helu, who holds a controlling stake in Telefonos de Mexico and other telecom concerns, was considered a highly influential force among MCI dissenting shareholders.

Another stockholder critical of MCI for accepting Verizon's bid over the higher offer from Qwest, immediately demanded that Verizon raise its price for all MCI shares to what it paid Helu. Bill Miller, chief executive of Legg Mason Funds Management, said in a letter to MCI that its board has a fiduciary duty to see that the other shareholders get what its largest one got.

"Shareholders would be outraged if the board did less than insist that the identical terms be made available to all other owners," he wrote. Miller said other shareholders should also be compensated for having to wait a year or more to receive their cash, while the merger goes through regulatory channels, when Helu will receive his money within a few months' time.

The move is Verizon's latest step in trying to win over MCI shareholders' to its acquisition of Qwest. The company has the backing of MCI's board of directors and the support of most industry analysts, who believe a Verizon/MCI combination would be stronger than a Qwest/MCI hookup.

But dissent among MCI stockholders continues.

"While this was an opportunity for us to purchase a block of shares under unique circumstances and is an important step forward in our acquisition of MCI, we will continue to assess the situation as we move toward a vote by the MCI shareholders," Verizon CEO and Chairman Ivan Seidenberg said in a printed statement announcing the stock buy.