MCI has gone from a feisty Chicago-based challenger to the original AT&T monopoly, to high-flying takeover target and industry leader by dint of its acquisition by Mississippi-based WorldCom, to the depths of disgrace and bankrupty by dint of WorldCom's management, and back again to coveted takeover target.

Now under the management of former Compaq CEO Michael Capellas (pictured) and based in Ashburn, VA,, MCI has righted itself as a major carrier without significant image problems and is the second-largest telco in the U.S. It is also embroiled in a takeover battle between current suitor Verizon, former suitor Qwest, and shareholder Deephaven Capital Management, a 5-percent stakeholder that is encouraging other owners to vote against the current Verizon offer.

Verizon has offered $8.44 billion to acquire MCI, or $26 per share, below a previous offer by Qwest at $30 per share. But MCI management decided to support the Verizon bid because it believes this combination would give it the best competitive edge against market-leader AT&T.

Deephaven disagrees. "The shareholder base would almost uniformly like to see this voted down and would like a combination with Qwest," said Matthew Halbower, of Minnetonka, MN-based Deephaven.

The MCI-Verizon transaction must be approved by holders of a majority of MCI's 325 million shares, and shareholder have previously withheld the votes necessary to complete this deal.