Indosuez refuses role in sale of BT shares

BANQUE Indosuez has refused to take part in the sale of a third tranche of BT shares, which is expected to raise up to pounds 5.5bn. It is understood that the bank objected to the structure of the sale, which precludes all but 11 global manager banks from marketing to 500 of the top institutions worldwide.

Banque Indosuez is not one of the global managers but had been invited to be part of a second tier of three regional groups marketing in Japan, North America and the rest of the world. SG Warburg, the merchant bank taking the lead role in the share sale, declined to comment. However, a bank spokesman said: 'We could not expect that everyone who was invited would agree to participate.'

He would not say whether any other banks had declined to take part.

The structure of the sale is designed to maximise proceeds by promoting as much competition as possible between banks. The global manager banks may each market to any of the 500 institutions to which the regional managers do not have access. However, they are not restricted to those institutions and may market elsewhere in competition with the regional managers.

Warburg said that in allocating the shares no preference would be shown to institutions that had dealt with one of the global 11. However, one analyst estimated that 98 per cent of the shares earmarked for institutions would be placed with the 'exempt' 500.

The Government, which still owns 22 per cent of BT, is expected to begin marketing at the end of May with a view to a share sale in mid-July. The sale suffered a blow this week when BT announced that Barry Romeril, its finance director, would leave on 30 June to join Xerox Corporation of the US.