Critics called the marketing campaign lacklustre and confusing, arguing that the reduced interest compared with previous privatisations suggested the issue was unlikely to be heavily oversubscribed.
'Given that BT2 was only 1.7 times oversubscribed, the lack of interest this time means it could be a close-run thing,' one telecommunications analyst said. He did not believe BT3 was in danger of being a flop, but thought the response demonstrated a 'weariness' on the part of the public for privatisations.
About 2.4 million existing BT shareholders and employees were automatically registered for BT3, bringing the total number to about 5 million, although exact figures will not be available until this week. This is still slightly less than the number for BT2, which saw only 1 million automatic registrations and 4.5 million new applicants for information.
The analyst explained: 'In BT2 most subscribers did not already hold BT shares, so the number of new people registering for information becomes important.'
It is expected that many people who were automatically registered will nevertheless have registered themselves.
The total cost of the BT3 promotion, which involved the comedian Mel Smith, appearing in adverts on television, newspapers and billboards, is thought to be pounds 10m. The adverts, by the agency WCRS, which did the successful Frankenstein adverts for electricity privatisation, were a caricature of the television detective Inspector Morse.
One rival firm said the advertising had failed to build up a head of steam, but felt the blame lay with the Treasury and its advisers, S G Warburg. 'A successful campaign needs good direction from the top and that did not seem to be evident. The share shop idea has confused the message. People have been saying to themselves: 'I just can't be bothered.' There are too many jokes in the television adverts, which deflect from the message.'
Others also blamed Warburg and the Treasury, saying that the decision to reduce the incentives to buy shares had been a turn-off.
Brunswick, the firm handling public relations for BT3, defended the campaign. 'We are more than happy that things are going to plan,' a spokesman said. 'It is in the interest of institutions and others to talk down BT3.'
He said the registration timetable for BT3 was two weeks shorter than for BT2. One critic pointed out that two- thirds of people normally register in the early stages of a privatisation promotion. But it was claimed that the number of registrants for BT3 was boosted at the last minute by publication of the prospectus last Tuesday.
Private investors will receive a 10p discount on the first of the three BT3 instalments, paying 150p against the 160p paid by institutions. The deadline for applications is 10am on 14 July and dealing begins on 19 July.
During the closing stages of the promotion, BT has suffered the embarrassment of having no finance director to lead its roadshow presentations following the departure of Barry Romeril last week. It is believed to be moving quickly to find a replacement.
Two relative newcomers to the BT fold have emerged as strong contenders for the pounds 300,000-a-year job. They are Richard Savage, who joined BT from ICI in 1991, and Robert Brace, who until a few years ago was Black & Decker's vice-president for finance and business development.
BT is expected to have a named successor by 29 July, when it holds its annual general meeting.
Speculation over potential external candidates has been muted amidst the hype over the share sale. However, Michael Hepher, BT's group managing director, is thought to have high regard for the finance director of Lloyds Abbey Life, Chris Wiscarson. Mr Hepher was chairman and managing director of Lloyds Abbey Life until he joined BT in 1991.
BT's executive directors now include only two BT 'career men' - Iain Vallance, the chairman, and Malcolm Argent, group director and secretary. This is a marked change from a few years ago.
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