C&W claims this is all MCI Worldcom's fault. The US group has allegedly breached the terms of the agreement with C&W by not transferring enough staff, attempting to poach customers, and generally making life difficult for the new owners. However, this raises questions about Mr Brown's supposedly legendary deal-making skills. Signing an agreement that relied so heavily on MCI - once described as a law firm with a satellite dish on the roof - was perhaps asking for trouble.
All this means relatively little for Mr Brown, safely ensconced at EDS' headquarters back in Texas (although EDS shareholders may want to take another look at the strategic alliance Mr Brown signed with MCI Worldcom, to great acclaim, back in January). For C&W, however, it further stretches the odds of it surviving as an independent company. Sure, C&W may win the case. But in the fast-forward world of the internet C&W has already lost vital ground to its rivals. No amount of damages will ever enable it to recover that ground.
C&W shares lost less than 3 per cent of their value yesterday, reflecting the market's belief that they are trading at a discount to the value of C&W's assets. Mr Wallace may have little choice but to realise that value by breaking up the company. If he doesn't do it, somebody else might.Reuse content