It also emerged that BT executives will forfeit tens of millions of pounds in bonuses if the UK group's lower takeover bid for MCI fails. Chris Godsmark, Business Correspondent, and Michael Harrison report.
BT was last night refusing to admit defeat after it found its pounds 13bn bid for MCI gazumped by WorldCom just weeks before the merger was to be completed. Senior executives at BT were said to be waiting for the outcome of an MCI board meeting, likely to take place as early as today.
Industry analysts raised the prospect that BT might accept the offer of three-way discussions from Bernard Ebbers, WorldCom's chairman. But a BT spokesman emphatically ruled out the move. "This is a matter for MCI. Until WorldCom and MCI have spoken there isn't much we can do about it."
BT highlighted the difference between its bid, which includes $4bn in cash, and WorldCom's $41.50 a share all-paper offer. "We have a deal on the table which is signed, sealed and will soon be delivered. It is in shares and cash. WorldCom are offering paper," said the spokesman. However, WorldCom shares firmed $1.75 to $38 on Wall Street yesterday, indicating growing support among the US investment community for the bid.
WorldCom again raised the prospect of discussions with BT if the rival merger plan went through. It would leave BT with a 10 per cent stake in MCI-WorldCom.
Colin Williams, president of international operations, said: "They're welcome to remain a shareholder and they're welcome to see how we'd jointly address the world environment. The door is open. Whether BT walks through it is another question."
Sir Peter Bonfield, BT chief executive, and its new managing director, Bill Cockburn, were in Brighton last night meeting the Prime Minister Tony Blair.
BT said Sir Peter would then be starting a pre-planned holiday abroad. "He's due a holiday and he'll be taking it. He deserves it."
BT shares rose a further 17.5p to 459.5p, as speculators who had piled into MCI shares in the US switched into BT stock.
The European Commission meanwhile said WorldCom's $30bn offer would be investigated under its merger rules.
"It's not been notified to us yet but at first glimpse it ought to be investigated. That seems obvious," said a spokesman for Karel van Miert, the competition commissioner.
Mr Williams said WorldCom's sales in Europe would be $600m this year, but added that MCI had no European business at all. "In merger terms this deal adds nothing at all to our European business," he said.
It emerged that if the merger with MCI fails to take place, then a group of senior BT executives, led by Sir Peter, stand to lose out on incentive packages worth tens of millions of pounds.
Sir Peter is due a pounds 500,000 one-off bonus if the deal is completed and will also be the biggest benefactor from a series of share bonus schemes that the merged company, Concert, would put in place. The various schemes could be worth as much as pounds 3m to Sir Peter, who would become chief executive of the combined business.
About 200 BT executives will participate in the Concert global equity incentive portfolio, as it is known. Of these, about 60 will be eligible for a scheme under which they can receive up to two times their salary in shares provided Concert meets certain performance targets judged against other international telecoms companies.
All 200 would be eligible for a deferred bonus plan under which Concert will top up annual bonuses by a third provided they are taken in shares, not cash.
Additionally, Sir Peter would participate in a scheme entitling him to share options worth four times salary.
BT sources yesterday disputed WorldCom's claim that MCI would not have to pay a $450m penalty if its shareholders rejected the merger with BT. "No matter which way they play it, they will have to pay $450m plus expenses."
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