Marconi dismissed £25bn merger deal at height of telecoms boom

THE board of the troubled telecoms equipment maker Marconi threw out a merger proposition as the height of the telecoms boom in 2000, it emerged today.

Had the merger proposal with unnamed suitors been accepted, shareholders could have sold their stakes when the company was valued at £25 billion. Today, following the collapse of the telecoms market, two profit warnings last year and the dismissal of both its chairman Lord Simpson and chief executive Sir Roger Hurn, and a share price collapse, the company, which has debts of £3bn, is now worth just £910 million.

The claim was made John Mayo, who was finance director at the time. He said: "The decision not to seek a merger partner deprived shareholders of the opportunity to maximise value at the top of the [telecoms] boom."

Mr Mayo said that at one crucial board meeting in February 2000, one non-executive director said: "We didn’t give up on the beaches of Dunkirk, and we are not going to give up now." He said that had the board accepted the merger proposal, shareholders could have sold shares when they were about 900 pence. Today they are worth just 32.5p.

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