Shares of MCI Inc. (MCI) and Qwest Communications International Inc. (Q) rose Friday as investors cheered Qwest's move to pursue its bid for MCI, raising the prospect of a bidding war with Verizon Communications Inc. (VZ).

MCI shares rose 4.8 percent to $21.66, topping the value of Verizon's bid, while Qwest's shares were up 2.3 percent at $3.93.

In a letter sent Thursday to MCI's board of directors, Qwest Chairman Richard Notebaert said the company would make a modified offer after reviewing the details of Verizon's winning bid. Qwest did not disclose what it would be willing to pay for the MCI, the No. 2 long distance and corporate telecommunications company.

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

Verizon's bid, which includes an exchange of stock, as well as $488 million in cash and the payment of nearly $1.5 billion in dividends by MCI, was originally valued at $6.75 billion, or $20.75 per share, based on Verizon's share price of $36.32 before the deal was announced on Sunday. Verizon shares on Friday were down 24 cents at $35.44 in morning trade.

Legg Mason analysts Daniel Zito and Brad Wilson said in a research note Friday that Qwest's announcement of a revised bid was likely "an attempt to boost its share price prior to making such a revised offer so a proposed transaction would be less dilutive."

Qwest's previous offer included $15.50 in Qwest common stock based on a ratio of 3.735 Qwest shares for each MCI share. The Qwest bid also included $7.50 a share in cash, along with $1.60 in quarterly dividends from MCI. Many analysts said Qwest would likely increase the cash portion of its offer.

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.

Verizon and MCI declined to comment on Qwest's move. The two companies filed the details of their merger agreement earlier Thursday, which includes a $200 million breakup fee for Verizon if the deal falls through. MCI's board is also restricted from sharing information with another bidder unless it deems a proposal superior to Verizon's.

Verizon expects to reap savings and increased revenue with a net present value of about $7 billion from the deal. Sources familiar with the talks said Qwest was seen as the weaker suitor due to its debt load, lower cash flow and less attractive business profile.

Qwest's lingering legal troubles also may have concerned MCI's board. Qwest reached a $250 million settlement with the Securities and Exchange Commission (search) last October, but has set aside another $500 million for legal settlements and warned that those reserves could rise.