What the Papers say: BT deal relies on longer term perspective

In June 1993, BT paid dollars 4.3 billion for a 20 per cent stake in MCI Communications Corp as part of its strategy to become the leading global operator. When on 4 November 1996, it announced an agreed takeover: ’BT seals USdollars 20 billion takeover of MCI to become global force’ (the Times, 4/11/96), the move was welcomed by the media.

In June 1993, BT paid dollars 4.3 billion for a 20 per cent stake

in MCI Communications Corp as part of its strategy to become the leading

global operator. When on 4 November 1996, it announced an agreed

takeover: ’BT seals USdollars 20 billion takeover of MCI to become

global force’ (the Times, 4/11/96), the move was welcomed by the

media.



Despite the generally favourable coverage, three areas of concern

remained: ’AT&T could spoil the party with protest on access’ (the

Independent, 4/11/96), ’BT and MCI are weak in Asia’ and ’Doubts about

value of BT deal’ (FT, 4/611/96). BT successfully contained the problems

until 11 July 1997, when MCI’s financial results threw the cost aspect

under the spotlight. In contrast with the announced deal in 1996, the

news was grim: ’BT plunges as MCI merger threatened’ (Evening Standard,

11/7/97), ’BT criticised for handling of MCI warning’ FT, 19/7/97) It

remains to be seen whether the City’s nerves will be steadied with a

longer term perspective.



Evaluation and analysis by CARMA International.



Cuttings supplied by The Broadcast Monitoring Company. ’What The Papers

Say’ can also be found at: www.carma.com/carma.



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