The upshot is that BT might face a shareholders' rebellion similar to the one that scuppered its bid for MCI if it were to bid outright. In the end, the City would be more prepared to take dilution from Vodafone than it would from BT. Sir Peter Bonfield, BT's chief executive, will nonetheless be working overtime to find a way round these awkward valuation difficulties.
The word is that he's already reached some kind of an understanding with Mr Esser, and this is what enables Mr Esser to be so confident that he can see off Vodafone on value grounds. Any such plan would probably involve a break-up, with BT perhaps taking Mannesmann's fixed-line operations and its stake in French mobile telephony.
But this is only speculation at this stage. One thing is certain. Vodafone's Chris Gent is not the only player in town, nor is Mr Esser the only one determined to frustrate Mr Gent's vaulting ambition. From the US, other eyes are turned on Europe's new battle field. Who knows? Goldman Sachs might even find a way of acting for them too.