Since then, rumours involving every conceivable combination of operators have regularly done the rounds in the City. With spring well and truly sprung, not one of the many mooted offers has actually emerged.
Still, it seems that investors are still all too happy to listen to a good telecoms story. BT itself was at the centre of the frenzy yesterday as finance director Robert Brace told a US conference that the company was "talking to a number of major players" in the US.
Although experienced BT watchers were hardly surprised, a number of investors felt the news was evidence that the company was about to unveil a major transatlantic connection, and the shares put on 47.5p to hit a new peak of 685p on hefty volume of 17 million.
Although it's no secret that BT is courting a number of US partners, a major constraint is the $7bn ($4.2bn) cash lump sum that MCI still has to pay BT as compensation for pulling out of their merger. MCI would dearly love to avoid shelling out, and if BT found another partner its lawyers might have grounds to argue that the payment wasn't necessary.
That argument wasn't enough to scare off the bulls, though, who counter that although BT might not be able to sign a deal there is nothing to stop it from announcing an engagement.
BT's possible partners include AT&T and GTE, which were both being named yesterday in connection with mobile network operators Orange and Vodafone. Both US groups have recently renewed their search for deals in Europe, and a British mobile phone company would fit well in either portfolio. Orange was up 17p to 428p while Vodafone added 35.5p to 617p.
The excitement even extended to Racal, up 23p to 326.5p, with whispers suggesting a bidder may pre-empt the flotation of its telecoms arm by snapping up the whole of Sir Ernest Harrison's electronics company.
The frenzy came on a day when the FTSE 100 came within a whisker of breaching the 6,000 barrier for the first time. It eventually closed up 94.3 points at 5997.9. Traders pointed to general post-budget optimism and a strong opening from Wall Street for the rise, as well as tomorrow's expiry of the March FTSE futures contract. The suggestion was that the arbitrageurs might try to score a big profit by pushing the FTSE as high as 6050 tomorrow.
Although these are short-term factors, it seems that the Labour government can do no wrong with the stock market. A cool pounds 17bn was added to the value of shares yesterday, and the market has gained a whopping pounds 300bn since Tony Blair was elected less than a year ago.
Energy Group, stuck in a two-way bid tussle between rival US utility groups Texas and Pacificorp, was the market's most active stock with over 18 million shares traded. US institutions are believed to be building up stakes in order to take up Energy Group's all-share offer, which is currently worth 865p compared to the 840p cash bid. The shares edged up 0.5p to 840p.
Media stocks also continued their recent rise, with Carlton adding 16.75p to 488.75p and BSkyB up a further 10.5p to 455p. Lord Hollick's United News & Media even managed to shrug off the sale of 60,000 shares by outgoing managing director David Arculus. The shares closed at a record 815p, up 15p.
Hopes that a white knight will come riding to the rescue of Bluebird Toys faded after Sir Ron Brierley's Guinness Peat Group, which has mounted a hostile bid for the Polly Pocket to Plasticine company, slammed Bluebird's prospects. The shares slipped 5.5p to 106p. GPG's offer stands at 101p.
A strong set of annual results boosted Bodycote, the metal processing specialist. Its shares ended the day up 110p at a record high of 1157.5p. Good figures also helped Cobham, the engineering group, up 47p to 978.5p while exhaust and tyre firm Kwik-Fit accelerated 79p to 511p.
Manchester United, once the City's favourite football share, continued its fall from grace after Wednesday's exit from the European Champions League. With Arsenal challenging strongly in the Premiership, fans and shareholders alike are concerned that United could finish the season without any silverware. The shares were booted down 3p to 143p.
Rivals Newcastle United, however, shrugged off a 2-1 defeat by bottom of the league Crystal Palace to put on 3.5p to 97p.Reuse content