An investor in MCI Inc. is trying to foil the pending merger with Verizon Communications Inc. and stir up interest in an alternate deal by launching a proxy fight, urging other shareholders to vote against Verizon's offer.

Deephaven Capital Management LLC, a hedge fund with 5 percent of MCI's shares, is campaigning to reverse the decision by MCI's board of directors to sell the company to Verizon and is soliciting shareholders to submit their proxy votes against the deal. In doing so, Deephaven is trying to capitalize on other MCI shareholders' discontent with the Verizon offer, which was lower than a previous offer made by Qwest Communications International Inc.

The campaign is a long shot, because although Deephaven is hoping Qwest will submit a new bid, it has no offer on the table.

Last month, Verizon won a protracted bidding war over MCI and agreed to pay $8.5 billion in cash and stock for the Ashburn-based company. Shareholders are expected to vote on the deal this summer.

But Minnetonka, Minn.-based Deephaven, which owns several funds that own shares in MCI, cited a previous, $9.74 billion offer from Qwest in its proxy filed with the Securities and Exchange Commission yesterday. Verizon is a subpar deal for MCI shareholders, who should hold out for a better offer, Deephaven said in its filing.

"Deephaven believes a combination with Qwest . . . would be in the interest of MCI stockholders," it said in the filing. In addition to its ownership in MCI, Deephaven disclosed it owns more than 800,000 Qwest shares, as well as a short position in 4.4 million Verizon shares. So Deephaven stands to benefit if MCI's shares rise because of an increased offer and if Qwest is strengthened by a merger with MCI. And the hedge fund would also gain if Verizon's shares were to fall. The company did not return a request for comment.

Denver-based Qwest withdrew its offer after repeated rejection from MCI's board, which said it preferred Verizon largely because of its greater financial stability. The company has not said it has no plans to reenter the bidding war, and Qwest spokesman Tyler Gronbach declined yesterday to comment on the Deephaven proxy.

"It's a long shot, because it's a chicken or the egg problem," said Scott C. Cleland, chief executive of Precursor Group Inc. "Are enough shareholders going to support Qwest, or is Qwest going to support shareholders? It's unlikely that shareholders will reject a bird in the hand."

MCI responded in a statement, saying, "We continue to believe in the strength of a MCI/Verizon merger. The regulatory approval process is well underway and we are looking forward to our upcoming shareholder vote."