Verizon Communications Inc. has reportedly set forth a closing condition for its $8.5 billion acquisition of MCI Corp.: The combined company shouldn’t be required abide by the corporate governance principles that MCI adopted when it emerged from bankruptcy.
According to the Financial Times, adopting those principles and practices would require that Verizon chairman and chief executive officer Ivan Seidenberg surrender one of those roles; that the combined company’s board consist entirely of independent directors, with the exception of the CEO; and that shareholders have the right to submit resolutions and to nominate board members.
The governance principles were put in place by MCI’s court-appointed monitor, former Securities and Exchange Commission chairman Richard Breeden, who reportedly also played a major role in helping Verizon land MCI in the face of a higher bid from Qwest Communications International Inc. According to the FT, Verizon has also requested that U.S. District Court Judge Jed Rakoff, who appointed Breeden, no longer require that he serve as monitor or that the combined company abide by his governance policies.
Earlier this week, Breeden was tentatively named as the monitor for KPMG LLP as part of a potential settlement with federal prosecutors regarding the auditor’s sale of allegedly abusive tax shelters, according to The Wall Street Journal.
Shareholders are anticipated to vote on Verizon’s MCI takeover in September.