Qwest Communications International Inc. (Q) is expected to hike its $8 billion takeover offer for long-distance telephone and data services company MCI Inc. (MCI), sources familiar with the situation said Friday.

The new bid, which would be given to MCI's board early next week, would value the company at more than $24.60 a share, the sources said. The bid would include more cash than Qwest's current proposal, sources said.

The new proposal will be structured to make "MCI's board think long and hard," said one source who declined to be named. "They wanted cash and protection and they'll have both."

Qwest and MCI declined to comment.

MCI had rejected Qwest's previous overtures in favor of a lower $6.7 billion acquisition offer from Verizon Communications Inc. (VZ), the nation's largest telephone company.

Ashburn, Virginia-based MCI chose Verizon, in part, for its solid balance sheet and strong growth prospects given its mix of wireless and local businesses. Qwest has $17 billion in debt.

Some large MCI shareholders have balked at the Verizon price and urged the carrier to reconsider a richer deal with Qwest. Verizon has given MCI two weeks to talk with the rival suitor about a merger.

Qwest's new offer will keep a protection against a decline in Qwest's stock price, said the source. The exact mix of cash, stock and dividends could not be determined.

The competition over MCI comes even as the long-distance telephone market continues to face shrinking revenues and increased competition.

Still, Verizon wants to buy MCI's long-distance assets and gain an immediate presence in the market to provide services to large corporate customers, rather than building that business on its own.

Meanwhile, Qwest, the smallest of the Baby Bell local telephone companies, sees a merger with MCI as a way to cut $14.8 billion in costs and gain more customers.

Verizon would have five days to match any top offer made by Qwest. If MCI chooses Qwest, it would have to pay Verizon $200 million to scrap their merger agreement.

Earlier this week, New York-based Verizon called its MCI offer a "winning bid," and noted that it has typically avoided bidding wars in prior acquisitions.

Shares of MCI added 20 cents to $23.92 on the Nasdaq. Shares of Qwest added 4 cents to $3.88 on the New York Stock Exchange (search).