MCI, which accepted a sweetened $7.6 billion bid from Verizon Tuesday, says it has permission from the New York telco to discuss with Qwest the terms of that company's latest offer.
Qwest says it offers MCI greater costs savings and more potential upside to the stock if the two companies combine. On Thursday, Qwest bumped up its already higher cash-and-stock offer to $8.9 billion and raised its fixed-share ratio, or collar, to $14, matching Verizon's latest collar.
Qwest has also offered to swap $2 billion in shares for $2 billion in cash to further entice MCI shareholders and provide a so-called backstop if its share price falls steeply.
MCI says Verizon has given it permission to talk with Qwest up until the shareholder vote, which has not been scheduled.
MCI shares rose 30 cents to $25.20, while Qwest shares fell 3 cents to $3.67 in early trading Friday.