But Qwest chief executive Richard C. Notebaert has been trumpeting his offer to shareholders, lobbying many of them directly, and he seems unlikely to give up without a fight.
"Qwest and Notebaert have indicated their tenacity," said Richard P. Nespola, chief executive of the Management Network Group Inc., a consultancy. "They see the their long-term survival with MCI."
Part of MCI's appeal is that it has $5.5 billion in cash and cash equivalents, which nearly cancels out its $5.9 billion in debt. And for Qwest, which has more than $17 billion in debt, MCI's cash alone is an important asset.
But that is potentially part of the problem for Qwest, which may have to use MCI's own cash to sweeten its bid further, analysts said. That would diminish the capital a combined MCI-Qwest would have to invest in its network and other aspects of its business, they said.
"The more [Notebaert] ups the ante, the more he increases the risk of the long-term horizon," Nespola said.
Cooperman said he thinks Qwest should keep increasing its bid instead of trying to acquire MCI through a hostile takeover, a move he said would be foolhardy.
A hostile takeover process could take months, and Qwest would then have to file for regulatory approvals. Verizon has already filed for regulatory approval for its proposed acquisition of MCI in 14 state utilities commissions.
But others said they still side with Qwest, even in a hostile situation.
"The upside is greater [with Qwest]," said David Ahl, who advises four major institutional investors in MCI. But he is also telling his clients to wait. "I'm happy that Verizon has raised its bid. It's a first step in what will be a legitimate auction for MCI."
Staff writer Ben White contributed to this report.