Verizon's

(VZ) - Get Report

end run in its takeover battle with

Qwest

(Q)

for

MCI

(MCIP)

may have backfired.

Institutional shareholders -- among others -- are criticizing Verizon's decision to pay $1.1 billion for a 13.75% stake in MCI held by Mexican billionaire Carlos Slim Helu. The offer is worth about $25.72 a share.

Bill Miller, the CEO of Legg Mason Capital Management and the portfolio manager of funds that own 5.6 million shares of MCI, is calling for equal treatment for all of MCI's shareholders. In a letter to the company's CEO, Michael Capellas, Miller said he would vote against a deal that included accommodation for Slim.

"There can be no reason for the board to support an offer to MCI owners that is substantially inferior to what Verizon has just agreed to pay for a non-control block of stock," Miller said in the letter, which was made public late Saturday. "Shareholders would be outraged if the Board did less than insist that the identical terms be made available to all other owners. That, of course, implies a higher value than the $25.72 cash price Mr. Slim will receive, since he will have the use of that cash shortly, while other MCI owners would have to wait until closing if Verizon offered the same price, including the same effective call option on Verizon's stock. Our rough calculation of the present value of what Verizon agreed to pay Mr. Slim, including the call, is in excess of $27.00."

MCI last week accepted Verizon's $6.7 billion offer. Qwest's latest offer is worth $27.50 a share, or $9.1 billion.

Additionally, under the agreement, Verizon said it would pay Slim's entities a bonus after one year, in an amount per MCI share equal to 0.7241 times the amount by which the price of Verizon's common shares exceed $35.52, measured over a 20-day period.

"If presented with any offer from Verizon that is less than the present value of what they are paying Mr. Slim, we will vote against it," Miller wrote.

Shares of MCI added 26 cents to $26.10 in the premarket. Qwest shares closed at $3.93, while Verizon's shares ended at $35.07 Friday.