Updated from 11:51 a.m.

Verizon

(VZ) - Get Report

and

MCI

(MCIP)

moved a step closer to their merger Tuesday as investors hoped for another round of bidding.

Verizon registered the 132 million shares that it plans to issue to MCI shareholders as part of its $7.6 billion stock-and-cash buyout. Monday's federal filing also included a shareholder proposal urging MCI holders to approve the merger, which is valued at $23.10 a share, though a vote date hadn't been determined.

Industry observers say it wouldn't be surprising to see

Qwest

(Q)

push for a shareholder vote on its rejected offer, which is valued at $9.1 billion, or $27.50 a share. MCI is also under pressure from some of its larger shareholders in the wake of Verizon's move Saturday to

buy out MCI's largest shareholder Carlos Slim Helu.

In a private deal, the New York phone giant offered the Mexican billionaire $1.1 billion for his 13.75% stake in MCI. The deal was seen as a way to win a large block of the MCI vote and a countermove against several vocal shareholders who had complained that Qwest's offer was superior.

But instead of sealing the deal, the recent maneuvers may serve to force both camps to make higher offers, say analysts.

"We believe the Slim sale puts added pressure on both Qwest and Verizon to increase their MCIP bids before a shareholder vote on the Verizon agreement," Lehman Brothers analyst Blake Bath wrote in a note Monday.

Some MCI shareholders

criticized the two-tier price reflected in the Slim sale and vowed to vote against a merger between Verizon and MCI.

Legg Mason money manager Bill Miller wrote in a letter Monday that all MCI shareholders should be treated equally.

"Shareholders would be outraged if the board did less than insist that the identical terms be made available to all other owners," Miller wrote.

Qwest joined in Tuesday, criticizing the MCI board's decision to stay with Verizon even with Qwest's own offer still available.

In a statement aimed at advancing its case with MCI shareholders, Qwest pointed out Tuesday that its own offer and the Slim buyout terms both were priced higher than Verizon's accepted offer. Though Qwest didn't indicate what direction it was headed, it seems likely that the jilted suitor isn't going away.

"We continue to listen to share owners and their frustrations with the events of this past weekend as we evaluate our options," Qwest said.

But some traders marveled at Verizon's cagey move to grab the largest available stake in MCI, largely because it pre-empts a similar maneuver by Qwest. Verizon was also able to acquire a large block of shares without triggering an antitakeover provision, or poison pill.

And as for other MCI stakeholders grumbling that they deserve more money, one hedge fund manager with no positions says: "Too bad."

Qwest is in a much more difficult position, having had three prior offers rejected by MCI's board. If Qwest were to try to

continue as a hostile acquirer, it would have to offer at least $31.25 a share to neutralize MCI's pill. This is a hefty price tag that would put even more pressure on the debt-heavy Denver phone shop.

And notably, last week Qwest turned down MCI's counterproposal to pay $30 a share to win the deal.

In late-morning trading Tuesday, MCI was up 4 cents to $26.05, Qwest was up 2 cents to $3.84 and Verizon was down 9 cents to $34.81.