SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): March 26, 1998
QWEST COMMUNICATIONS INTERNATIONAL INC.
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
000-22609 84-1339282
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(Commission File Number) (IRS Employer Identification No.)
555 SEVENTEENTH STREET, SUITE 1000 DENVER, COLORADO 80202
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 303-291-1400
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS
On March 26, 1998, the Registrant and certain stockholders of EUnet
International Limited, a company organized under the laws of England ("EUnet"),
a leading, Amsterdam-based, European Internet service provider with business
units operating in 13 European countries, entered into a definitive Transaction
Agreement (the "EUnet Transaction Agreement"), to acquire EUnet for
approximately $154 million in cash and Qwest Common Stock (as defined below).
Pursuant to the EUnet Transaction Agreement, the holders of all of the
preference shares, "A" ordinary shares and options of EUnet and of more than 92%
of the ordinary shares of EUnet have agreed to sell their shares or options to
the Registrant. At the closing, EUnet stockholders and optionholders will
receive 3,621,590 newly issued shares of common stock, par value $.01 per share,
of the Registrant ("Qwest Common Stock"), having a deemed value of approximately
$135.5 million (based upon a deemed value of approximately $37.42 per share),
and approximately $4.5 million in cash. In addition, they will receive
approximately $14.4 million in cash (plus interest to the date of payment), or
(at the Registrant's option) additional shares of Qwest Common Stock having that
value (based upon an average of the closing prices for a specified 15-day
period), in connection with the registration under the Securities Act of 1933,
as amended (the "Securities Act"), of the resale of the shares of Qwest Common
Stock issued at the closing. Shares of Qwest Common Stock (included in the $154
million referred to above) having a deemed value of $23 million will be placed
in escrow for two years, and may be recovered by the Registrant, to satisfy any
indemnification claims. The closing of the transactions contemplated by the
EUnet Transaction Agreement is conditioned on the satisfaction of certain
customary conditions, including the receipt of certain regulatory approvals. The
parties expect the closing to occur in April 1998. Promptly thereafter, the
Registrant will acquire any remaining ordinary shares of EUnet by means of a
compulsory purchase under applicable law. The acquisition will be accounted for
as a purchase.
The shares of Qwest Common Stock will be issued to EUnet stockholders
in a private placement exempt from registration under the Securities Act. The
Registrant has agreed to undertake the registration of the resale of the shares
of Qwest Common Stock under the Securities Act not later than, and such shares
will not be freely tradeable until, the earlier of (i) three weeks after the
closing of the Merger or (ii) September 30, 1998 (or, under certain
circumstances, a later date, but no later than October 31, 1998).
The joint press release dated March 26, 1998 of the Registrant and
EUnet announcing the execution of the Transaction Agreement is filed with the
Securities and Exchange Commission as Exhibit 99.1 to this Current Report on
Form 8-K.
The Registrant cautions that the press release contains forward-looking
statements that include, among others, statements concerning the Registrant's
plans to complete an approximately 16,250 route mile coast-to-coast,
technologically advanced, fiber optic telecommunications network (the "Qwest
Network"), expectations as to funding its capital requirements, anticipated
expansion of carrier and commercial services and other statements of
expectations, beliefs, future plans and strategies, anticipated developments and
other matters that are not historical facts. The Registrant cautions that these
forward-looking statements
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are subject to risks and uncertainties that could cause actual events or results
to differ materially from those expressed or implied by the statements.
Important factors that could prevent the Registrant from achieving its stated
goals include, but are not limited to; (i) failure by the Registrant to manage
effectively, cost efficiently and on a timely basis the construction of the
Qwest Network route segments; (ii) failure by the Registrant to enter into
additional customer contracts to sell dark fiber or provide high-volume capacity
and otherwise expand its telecommunications customer base; (iii) failure by the
Registrant to obtain and maintain all necessary rights-of-way; (iv) intense
competition in the Registrant's carrier services and commercial services
markets; (v) the potential for rapid and significant changes in technology and
their effect on the Company's operations; (vi) operating and financial risks
related to managing rapid growth and integrating acquired businesses; (vii)
adverse changes in the regulatory environment; (viii) failure by the Registrant
to consummate the previously announced merger with LCI International Inc. timely
or at all; and (ix) risks of being highly leveraged and sustaining operating
cash deficits.
The shares of Qwest Common Stock to be issued in the transaction have
not been registered under the Securities Act and, unless so registered or an
exemption from registration is available, may not be offered or sold in the
United States or its territories and possessions or to any "U.S. Person" (within
the meaning of the Securities Act) and hedging transactions involving such
shares may not be conducted unless in compliance with the Securities Act.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
Exhibit 99.1 Press release of the Registrant and EUnet International
Limited dated March 26, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
QWEST COMMUNICATIONS INTERNATIONAL INC.
DATE: March 27, 1998 By: /s/ ROBERT S. WOODRUFF
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Robert S. Woodruff
Executive Vice President - Finance,
Chief Financial Officer and
Treasurer
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EXHIBIT INDEX
Exhibit 99.1 Press release of the Registrant and EUnet International
Limited dated March 26, 1998.
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