Following on from the revelations that Qwest’s bid for Ashburn, Virginia-based MCI was worth an extra $1.2bn on Verizon’s winning bid, comes the announcement that Qwest fully intends to submit a new bid for MCI, a move sure to add to discontent among MCI shareholders worried that MCI management opted for the lesser value bid.

A letter from Qwest’s CEO and chairman Richard Notebaert to MCI’s board of directors revealed that Qwest would make another offer after reviewing the details of Verizon’s bid. In the letter filed at the US Securities and Exchange Commission, the fourth-place telecoms operator in the US bluntly put its point across that it feels that MCI’s board have not acted in the best interests of shareholder value in refusing its deal.

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, and we would expect MCI and its advisers to engage us in meaningful dialog regarding the merits of our offer and we would further expect access to due diligence information consistent with that offered other parties, wrote Notebaert.

He did not go into any further details regarding the price of the modified bid, but Notebaert pointed out that the original Qwest bid was a great deal higher than Verizon’s bid, and that a deal with Qwest could be approved by regulators six months faster than the Verizon-MCI deal.

Both MCI and Verizon are declining to comment, but the letter is a blow to MCI’s CEO Michael Capellas who last week met with individual shareholders to explain the board’s acceptance of Verizon’s lower offer.

His meeting was to try to calm the investors and avoid a shareholder revolt, but the latest news from Qwest will only add to the difficulties of trying to keep MCI shareholders backing the Verizon deal, especially after three institutional investors, who represented 10.5% of MCI shares, broke rank last week and publicly criticized the MCI board for accepting the lesser bid.

The announcement that Qwest would be submitting a new bid is also likely to increase the pressure on Verizon to increase the size of its bid, in order to avoid a shareholder revolt. Some are predicting a possible bidding war.

Despite Qwest’s fighting talk, most analysts doubt it has the ability to take on Verizon over MCI. Verizon is the market-leader in the US communications industry, and its market value is 14 times larger than that of Qwest. Qwest also has a high debt pile and less attractive shares compared to Verizon.

Unfortunately for Qwest, most analysts seem to agree that Verizon’s acquisition of MCI leaves Qwest in a poor position strategically, so it is no surprise it is still trying to pull a last-minute rabbit of a hat. Last week Deutsche Bank said: Qwest is now stranded in no-man’s land, with no apparent viable long-term strategy.

The Denver, Colorado-based carrier provides local phone service, long-distance calling and high-speed DSL internet service in 14 states. However, it is currently saddled with $17bn of debt, and this debt (acquired from its rush to build high-speed communications networks during the internet boom), meant it didn’t have the resources to build a mobile phone network like other regional phone companies.

There is speculation that Qwest could still find a merger partner, with Deutsche Telekom AG, BellSouth Corp, and Sprint Corp being touted as possibilities who could take on Qwest’s debt in exchange for its customer base and DSL internet network.

Whatever the developments from the latest moves, any thoughts that Capellas and MCI’s board would have a quiet weekend have been wiped out with the latest announcement.

Shares in MCI rose to 5.2% to $21.73 on Nasdaq as of 3.30pm GMT Friday, as expectations of a bidding war for the carrier increased.

MCI did not respond to ComputerWire’s request for an interview.