Qwest to Submit New Bid for MCI

Qwest Communications International Inc. (Q) said Thursday it would submit a new bid to buy MCI Inc. after it reviewed the details of MCI's agreement to be bought by Verizon Communications Inc. (VZ).

In a filing with the Securities and Exchange Commission (search), Qwest said it sent a letter from Chairman Richard Notebaert to MCI's board Thursday, saying MCI has not responded to Qwest's previous offer.

"We would like to advise you that once we have completed our review of the Verizon merger agreement, we do intend to submit a modified offer to acquire MCI," the letter said.

Verizon and MCI declined to comment. The two companies filed the details of their merger agreement earlier Thursday.

Qwest, the fourth-largest U.S. local telephone company, said Wednesday it had offered a deal it valued at $8 billion on Sunday, which MCI rejected in favor of Verizon's bid. At Thursday's closing share prices, Qwest's last offer would be worth $7.6 billion, compared to $6.7 billion for Verizon's winning bid.

Several MCI shareholders have complained in recent days that the Verizon offer undervalued MCI and urged Qwest to come forward with a better bid. MCI Chief Executive Michael Capellas (search) has met with shareholders trying to alleviate their concerns.

"I think MCI's more cognizant at this point of its shareholders' interest in Qwest's proposal," said John Paulson, whose Paulson & Co. hedge fund owns 10.8 million MCI shares.