TELECOMMUNICATIONS

QWEST RAISES MCI BID TO $8.45B TO THWART VERIZON

Qwest Communications International, the no. 4 American local-telephone company, raised its takeover bid for MCI to $8.45 billion, heightening pressure on Verizon Communications to increase a competing offer.

Qwest offered $26 a share for MCI, the second-largest American long-distance phone company, adding cash to its prior offer of $24.60, Denver-based Qwest said in a filing to the Securities and Exchange Commission today. Qwest will pay $15.50 in stock and $10.50 in cash for each MCI share.

“Unless Verizon raises their offer, they are out of the picture, “Leon Cooperman, whose hedge fund is one of MCI’s 10 largest shareholders, said in an e-mail. His Omega Advisors owned 2.9% of MCI’s shares as of December. “Qwest can still go higher if they have to.”

Mr. Cooperman is among holders of at least 26% of MCI’s stock who say the offer from New York-based Verizon, announced last month, is too low and want MCI’s chief executive, Michael Capellas, to negotiate a better deal. The bid from Verizon, the largest American phone company, is valued at $20.36 a share, 22% lower than Qwest’s revised proposal.

Qwest’s CEO, Richard Notebaert, and Verizon’s CEO, Ivan Seidenberg, want MCI’s 140-nation voice-and-data network and its contracts with large corporations. The deal would help Verizon keep up with SBC Communications, which will become the largest American phone company through its planned purchase of AT&T.

– Bloomberg News

ECONOMY

INDEX OF LEADING INDICATORS RISES

An index designed to forecast future economic activity rose a middling 0.1% in February after a decline of 0.3% in January, the Conference Board reported on Thursday. Still, the February increase was the third in the last four months, and Conference Board economist Kenneth Goldstein said the trend was “pointing to [economic] growth this spring.” The business-financed research group said its Composite Index of Leading Economic Indicators advanced to 115.6 in February from 115.5 the previous month. The index had risen 0.3% in both November and December. Mr. Goldstein said the statistics were “reflecting an economy that is continuing to improve.”

– Associated Press

NEW UNEMPLOYMENT CLAIMS DROP

The Labor Department yesterday reported that the number of new people signing up for unemployment benefits last week declined for the first time in a month – an encouraging sign that the jobs market may be gaining traction.

The department said new applications for unemployment insurance dropped a seasonally adjusted 10,000 to 318,000 for the week ending March 12.The level of 318,000 was the lowest since late February.

The last time new filings for jobless benefits fell was in the week ending February 12, when they dipped by 1,000.

The 318,000 level of claims – while slightly higher than the 315,000 that some economists were forecasting – still pointed to a gradually improving labor market. A year ago, new claims stood at 333,000.

– Associated Press

NATIONAL

CREDIT CARD COMPANIES TO BAR ONLINE CIGARETTE PURCHASES

Major credit card companies will no longer handle Internet sales of cigarettes under a nationwide agreement announced Thursday. The move is aimed at illegal dealers that are trying to avoid sales taxes or sell to underage customers. The thriving trade of Internet tobacco undercuts local businesses that sell cigarettes and often avoids sales tax for states and cities, allowing smokers to buy cigarettes considerably cheaper online. The agreement among virtually all credit card companies, state officials from around the country, and the Bureau of Alcohol, Tobacco, Firearms and Explosives is effective immediately. Smokers would still be able to buy cigarettes over the Internet, but they would not be allowed to use their credit cards, including Visa, MasterCard, American Express and Discover. Instead, they would have to use checks, money orders or some other payment system that would probably hold up delivery. The long-unchecked practice of buying cigarettes and chewing tobacco over the Internet across state lines is illegal in New York and many other states, but enforcement has been difficult. The ATF estimated that millions of dollars from illegal cigarette sales are diverted each year to terrorists and criminal organizations. And states lose more than $1 billion a year in tax revenue from Internet tobacco sales, said Sheree Mixell, ATF spokeswoman.

– Associated Press