Verizon’s played its ace in the battle for MCI, when it decided to buy Carlos Slim’s 13.7% stake in MCI for $1.1 billion in cash. That works out to about $25.72 a share, and will pay Slim’s companies a bonus in one year should Verizon’s share price exceed $35.25. What I find amazing is the Slim decided to settle for that amount - given that he had publicly said he wanted more for MCI, much more. Now what this tells me - Verizon is ready to boost its price to $25.72, versus $23.10 a share it currently is offering. Secondly, and perhaps most importantly, it seems that a substantial number of MCI shareholders, perhaps more than 50% were in favor of Qwest deal, and proxy would have shown that. By taking out Slim out of the equation, well now they can start chipping away at Qwest base. As someone, I respect a lot, points out this whole sage is about “shareholder opportunitism vs. MCI Board neglect. I want to see the hedgies crying in the WSJ monday about how Slim sold them up the river.”

“Verizon pulled a fast one, but did it cleanly. This was a smart move, and one aimed at getting other major MCI shareholders to get on board with Verizon,” says Ben Silverman, telecom analyst for independent investment newsletter FindProfit.com. “Slim could be the lead domino when it comes to other large MCI shareholders. Though Qwest says other major MCI shareholders support their takeover proposal, if major MCI shareholders feel like they can negotiate directly with Verizon now and receive some additional upside down the road, we may see sentiment turn against Qwest.

What VZ & Q had to say:

“While this was an opportunity for us to purchase a block of shares under unique circumstances and is an important step forward in our acquisition of MCI, we will continue to assess the situation as we move toward a vote by the MCI shareholders,” Seidenberg said in a statement.

“By entering into its deal with Mr. Slim, Verizon has both created two classes of shareholders and called into question the MCI board’s previous determination that Verizon’s lower offer to the other MCI shareholders was superior and fair,” Qwest said in a statement Saturday. “We believe Qwest has a superior proposal for all shareholders.”