updated 3/23/2005 8:46:47 PM ET 2005-03-24T01:46:47

MCI Inc. Wednesday said it would hold continued talks with suitor Qwest Communications International Inc., prolonging the takeover push for the No. 2 U.S. long-distance telephone company.

MCI has agreed to be bought by Verizon Communications Inc.  for $6.56 billion, but some shareholders have balked at that price and urged the company to finalize a deal with Qwest, which has bid $8.45 billion.

Verizon, the nation’s largest telephone company, agreed to let MCI continue talks with Qwest through March 28.

“We understand that MCI’s board has additional questions surrounding our offer. We are confident that we can quickly address these questions and provide the basis for the board to declare that our bid for MCI is the superior offer,” Qwest said in a statement.

If MCI’s board declared Qwest’s offer superior, Verizon would have five days to respond. MCI must pay Verizon a $200 million break-up fee to scrap their merger agreement.

Ultimately, MCI and Verizon may agree on a new price to fend off Qwest and quiet shareholder concerns, said some analysts and investors.

Qwest and Verizon have publicly fought a war of words over their competing bids.

Qwest, the fourth-largest U.S local telephone company, has said it could generate $14.8 billion in cost cuts from a deal with MCI, more than double the amount Verizon has forecast from its proposal.

Verizon retorted that Qwest would likely fail to meet most of its goals for cost savings. Verizon also questioned whether a merged Qwest-MCI would have enough cash to survive. Qwest has $17 billion in debt.

Although MCI and its long-distance rivals have suffered from shrinking revenues and increased competition, Verizon sees the acquisition as a way to quickly enter the market for providing services to large corporations. Qwest, meanwhile, wants MCI to gain more customers, new revenues and broader geographic reach.

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