A shareholder in MCI is seeking support from other shareholders to block Verizon 's plan to acquire MCI.

MCI's board of directors approved a bid of $26 per MCI share from Verizon on May 2, favoring it over a $30 per share bid from rival Qwest. Both parties had steadily upped their offers since Verizon bid cash and stock worth $23.10 per share on March 29.

While Verizon's offer satisfied MCI board members, the decision to reject Qwest's higher offer didn't please some shareholders -- including Deephaven Capital Management of Minnetonka, Minn.

The company opposes the merger between MCI and Verizon because it does not believe this will improve value for stockholders, and favors the rival bid from Qwest, it said in the filing.

Deephaven manages funds holding almost 5% of MCI's shares, and will use them to vote against acceptance of Verizon's bid at a forthcoming special meeting of stockholders, according to documents filed with the U.S. Securities and Exchange Commission on Wednesday. It is also soliciting proxies from other MCI shareholders to vote against the Verizon deal, it said.

In addition to the 16.1 million shares of MCI stock it controls, Deephaven also has beneficial ownership of 800,100 shares of Qwest stock, according to the filing. It owns no Verizon shares, but has an aggregate short position of 4.4 million shares, meaning it expects Verizon's share price will fall. In addition, Deephaven owns $194 million in MCI bonds and $79 million in Qwest bonds, it said.

The merger requires the approval of a majority of MCI's outstanding shares, Deephaven said. If it doesn't get it, there's no guarantee that Qwest will renew its earlier $30 per share bid, which it withdrew after MCI rejected it on May 2.

The IDG News Service is a Network World affiliate.