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 | | Friday, 18 January, 2002, 16:59 GMT Marconi 'rejected' �25bn merger idea  Marconi chiefs rejected a merger proposal at the height of the telecoms boom that could have secured investors �9 per share, the firm's former finance director has told the Financial Times. John Mayo told the paper that he proposed seeking a merger when the firm was worth about �25bn - a deal that would have helped many investors to substantial profits. But Marconi directors, at a meeting in February 2000, ignored Mr Mayo's recommendation to enter into merger talks, he said. Marconi's market value later slumped to less than �1bn in one of the most notorious share slides in UK corporate history. A month after Mr Mayo says he made his proposal to the board, Marconi shares hit �12.50, before the start of the decline which saw the stock hit 13p last October. The stock closed 0.5p lower at 31.75p in London on Friday. Marconi has declined to comment on the report. Embarrassing? Mr Mayo, who was chief executive designate, was ousted from Marconi in July last year after the company issued a shock profits warning that hastened the share price collapse.
His claims are expected to be embarrassing for Lord Weinstock who founded GEC, which was later renamed Marconi, as well as former and present chief executives Lord Simpson and Mike Parton. The company had tried to recreate itself as a telecoms equipment heavyweight after shedding its GEC defence business in 1999. The plan was scuppered by the slump in the once booming telecoms sector, after a sharp fall in demand for equipment including from Marconi's top customer, British Telecom. Six months of woe The company this week reported more poor results and announced another 4,000 job cuts on top of 9,000 last year. In the past six months Marconi has cannibalised its business, selling subsidiaries ranging from medical systems to gasoline pumps, reducing its net debt to �2.9bn from �4.4bn last year. Marconi announced a buyback of �200m ($286m) worth of bonds on Thursday, bringing the total to more than $500m in a month as it tries to get its finances into shape. The latest buyback comes just four days before a crucial bank meeting, in which Marconi will try to refinance more than 4.5bn euros in loans. Over the past 12 months, it has issued three profit warnings and pushed out its top management. | |
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