Montreal-based telecommunications holding company BCE Inc is said to be planning to sell its $1,000m holding in Cable & Wireless Plc unit Mercury Communications Ltd. It’s not a question of ‘if’, but ‘when?,’ an industry source told Canada’s Financial Post. BCE acquired 20% of Mercury in November 1992, and always looked a rather odd partner. But Bob Kearney, deputy chairman of Bell Canada International Management, the holding company for BCE’s interests in the UK, denied a sale is in the offing. There really is absolutely nothing to that kind of story, he said. Mercury also rebutted any talk of a divorce. But observers are not so sure, citing three reasons why BCE might pull out. Telecommunications consultant Ian Angus told the Financial Post that BCE’s wide-ranging alliances with MCI Communications Corp, including the Financial Network association, formed in 1992 to offer international network systems integration and facilities management to financial institutions, are the most obvious reason for a dive stiture. The June after BCE bought into Mercury, British Telecommunications Plc bought 20% of MCI – Mercury’s biggest competitor. Kearney dismissed this, saying, We’ve been able to quite comfortably work with MCI in North America and… with Mercury in the UK. Observers also noted that BCE’s Mercury investment is much larger in dollar terms than in other ventures, a discrepancy that might lead BCE to rationalise its Mercury holding via sale of part of its stake, say industry sources. The final factor being pointed to is Mercury’s less-than-sparkling performance. Last year, the company started a radical restructuring that included shedding almost a quarter of its workforce and selling or closing many ancillary businesses.
