Verizon threatens to bail on buyout

Verizon threatened Monday to abandon its $7.5 billion buyout deal for MCI Inc. rather than pay more should the long-distance telephone company declare a rival $8.9 billion offer from Qwest as superior.

MCI’s shares fell sharply after the announcement, which came one day before a deadline set by Qwest Communications International Inc. for MCI to accept or reject its bid.

MCI declined comment on the latest tactical move in the two-month bidding war. It also wouldn’t say whether it planned any response before Qwest’s deadline.

Shares of MCI fell 21 cents to close at $25.08 in Monday trading on the Nasdaq Stock Market despite rising as high as $25.50 earlier in the session amid hopes the bidding will produce a higher takeover price.

Rankings

Wal-Mart stays atop Fortune 500

Wal-Mart Stores Inc. retained the top spot in Fortune magazine’s 2005 ranking of the 500 largest publicly traded U.S. companies, but soaring commodity prices led to big gains in revenues and profits for oil and metal producers.

Wal-Mart was No. 1 on the Fortune 500 for the fourth straight year, with 2004 sales of more than $288.189 billion, up about 11 percent from 2003.

Exxon Mobil Corp. ranked second once again with $270.772 billion in sales, up a stunning 27 percent from the year before as the price of oil rose above $50 a barrel and gasoline sold for more than $2 a gallon. The company also topped Fortune’s profits charts for the second year in a row with $25.3 billion in earnings, breaking Ford Motor Co.’s record from 1998.

Accounting

Payless ShoeSource restates earnings

Payless ShoeSource Inc. is restating its fourth-quarter and fiscal-year financial statements for 2004, in a move to correct “inappropriate” accounting treatment for leases and lease-related items, the Topeka-based company said in a filing Monday with the Securities and Exchange Commission.

The company said it had reviewed such accounting treatments, just as many other retailers and restaurant chains have done in recent months. It found that the changes would not have any “material” effects on previously reported statements, other than for its fourth quarter of the 2004 fiscal year.

Payless also reported Monday that it had discovered an error related to the company’s accounting for deferred income taxes. Before 1998, deferred income tax assets were understated by about $4.5 million. The company recorded a correction that increased deferred income tax assets by approximately $4.5 million, and had no effects on financial statements for the past three years.