The future of MCI had been brought into focus over the past couple of weeks following SBC Communications Inc’s $16bn acquisition of former parent, AT&T Corp, earlier this month. Following that deal, Qwest quickly announced it had submitted a $6.3bn offer to buy MCI.

However, Ashburn, Virginia-based MCI remained remarkably non-committal, because behind the scenes it was talking to both Qwest, and market leader Verizon. Matters were brought to a head last weekend, when Verizon matched Qwest $6.3bn offer. Qwest then increased its bid to $7.3bn, but on Sunday evening, MCI’s board decided to accept Verizon’s improved cash and stock offer of $6.75bn. The deal was announced to the public on Monday morning.

However, in turning down Qwest’s higher value bid, MCI’s board has riled some of the company’s shareholders. According to reports, three MCI shareholders, who between them own 10.5% of the telephone company, say the Verizon offer undervalues their holdings.

The three rebels are thought to be John Paulson at Paulson & Co (a 4.1% shareholder), Bruce Berkowitz at Fairholme Capital Management LLC (with a 3.5% stake), and Leon Cooperman at Omega Advisors Inc (a 2.9% stake).

All three have publicly stated that MCI should reconsider a higher bid from Qwest or stay independent. This is despite MCI’s board agreeing to a $200m break-off fee, if the deal with Verizon does not go through.

The offer is very disappointing for MCI owners, said Berkowitz, president of Fairholme Capital Management. The company in my opinion is being given away, he said on CNN. This is not over. I think the owners need to have a say.

John Paulson and Leon Cooperman have said Qwest should make its offer public and press to forge a deal with MCI.

The shareholder discontent follows comments made by Qwest’s CEO Richard C. Notebaert, who on Tuesday announced that he was keeping his options open about his next move. Notebaert also expressed surprise that MCI had chosen to accept Verizon’s offer over Qwest’s higher bid.

We were a very good fit for MCI or we would not have made the proposals as strong as they were, Notebaert said in an interview. How do you argue leaving a billion of cash? That’s a lot of money to leave on the table. That’s why you see some of their shareholders rolling their eyes.

MCI shareholders are scheduled to meet in May, and it remains to be seen whether the rumblings of discontent will spread to more MCI shareholders. If the discontent does spread, it possible that Qwest could continue to push its offer, or even make a higher one.

That would pressure Verizon to raise its bid and could make it harder for MCI’s CEO Michael D. Capellas to win shareholder approval for the deal. A bidding war is also another possibility.

In the end however, the real decision makers are MCI’s largest shareholders, whose opinion is crucial if the Verizon offer is to be accepted.

The largest MCI shareholder is the Mexican billionaire, Carlos Slim Helu, who is also Latin America’s richest man. He has a 13.7% stake in the company, and is reportedly set to make a profit of at least $600m on his investment in MCI if the Verizon deal goes through. The private investment firm ESL Partners LP and MatlinPatterson Global Opportunities Partners LP are the second- and third-largest shareholders.

News of the discontent sent MCI shares up 0.5% to $20.65 on Nasdaq, as of 5.20pm GMT on Wednesday.