British Telecom chief executive Peter Bonfield blamed shareholder reticence for the collapse of the UK telecoms company's proposed merger with MCI.
He told delegates at the opening of the annual Telecommunication Managers' Association (TMA) conference in Brighton last week, that major shareholders did not want BT to acquire the US telco when the price went above $50 an MCI share. BT had originally offered $32 per share, while WorldCom eventually won MCI's hand for $51 a share.
Bonfield said: 'BT is regarded as a relatively stable risk of stock and that is what our shareholders have invested in. They don't want us to get into a market they regard as very risky.'
Bonfield said that BT would use the $465 million break-up fee it will receive from MCI's parent WorldCom, plus the $51 a share it will get for its existing stake in the US carrier, to reinvest in Concert, its surviving joint venture with MCI, and will look for alternative US partners.
He said: 'We want to put a lot of investment in the UK market and will be evaluating whether to make another investment in the US market over the next months.'
But telecoms managers did not believe BT will achieve its aim of penetrating the US market within a year, as about 400 delegates voted that BT would fail.
Voting in an instant electronic poll, 72 per cent said BT would fail, while 24 per cent believed it could succeed despite the collapse of its proposed merger with MCI.
Bonfield also said: 'The question about whether we were right to sell our stake in MCI is not what we had to ask ourselves. It was whether we were right to sell it at that price, and the reason we thought that moving ahead with MCI was the right solution. I am still convinced it was the right solution.'
But there was some solace for Bonfield in the results of the next ballot - on whether the audience agreed BT was right to sell its 20 per cent stake in MCI. The majority - 63 per cent - agreed BT had made the right move, while 24 per cent disagreed. At last year's event, 86 per cent thought the BT/MCI deal was a good idea.
The audience was asked to vote on the motion that the BT board was doing a good job. Less than half - 46 per cent - said yes, while one per cent strongly disagreed.
Thirteen per cent disagreed while 24 per cent remained neutral.
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