Qwest prowls perimeter of MCI-Verizon deal

NEW YORK, May 9 (UPI) -- MCI shareholders are unhappy the board rejected a bid from Denver's Qwest Communications International Inc. and took an offer more than $1 billion less.

Last week MCI's board accepted a $8.44 billion bid from Verizon Communications Inc. rather than Qwest's $9.74 billion.

Qwest has been talking to big MCI shareholders and believe there could be enough support to vote down the Verizon deal if there is another option on the table, the Wall Street Journal reported Monday.

Part of Qwest's challenge is to more adequately limit the downside risk to MCI shareholders from the stock portion of Qwest's offer. That offer could turn out to be worth less than $9.74 billion if the share price of a Qwest-MCI entity fell after a merger.

"They're testing the waters," said John Paulson, president of Paulson & Co., a key MCI shareholder. "The bankers are sounding out if the MCI shareholders are still interested in a Qwest proposal."