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New Qwest CEO Has Reputation as Asset Seller

June 18, 2002|From Bloomberg News

Qwest Communications International Inc.'s new chief executive will take control of efforts to sell the company's yellow-pages unit to avoid a loan default--and he might not stop there, analysts said Monday.

Richard Notebaert, who replaced ousted CEO Joseph Nacchio over the weekend, may sell other assets and pare expenses at Qwest, the biggest local telephone company in 14 Western states.

"He may [have been] brought in to sell the whole kit and caboodle," said Terry Barnich, who runs New Paradigm Resources Group, a Chicago research firm whose customers include Qwest.

Notebaert developed a reputation as a cost cutter and asset seller as CEO of two other prominent telecommunications firms, Tellabs Inc. and Ameritech Corp. At Tellabs, Notebaert slashed about 40% of the work force. The telecommunications equipment maker's shares fell 84% on his watch.

At Ameritech, Notebaert was "very cost-conscious, very bottom-line-oriented, which is not a bad thing these days," said Ray Romero, former general counsel of Ameritech's international division and now general counsel for ATSI Communications Inc., a phone company in San Antonio.

During Notebaert's five years as CEO of Ameritech, the company's financial performance was better than that of rivals, Jefferies & Co. analyst Richard Klugman wrote in a research note.

Notebaert guided the Chicago-based local phone company's $80.6-billion sale to SBC Communications Inc. in 1999 before joining Tellabs in 2000.

Nacchio, who joined Qwest in 1997, had been trying to sell the company's yellow-pages unit, a business valued by analysts at as much as $10 billion. He was negotiating with potential buyers and had said a final decision would be made by mid-July. Notebaert probably will complete that transaction, analysts said.

"He's got deep experience on a number of levels, both on the local phone business and also from the equipment side," Jeff Kagan, an independent telecommunications analyst in Atlanta, said of Notebaert.

Shares of Denver-based Qwest rose 85 cents to $5 on Nasdaq.

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