British Telecommunications Plc is considering using the money it expects to get from AT&T Co for its 22% of McCaw Cellular Communications Inc to buy a stake in Electronic Data Systems Corp, according to the Dallas Morning News. Neither side is commenting, but General Motors Corp is keen to find a partner for its computer services company that would give the struggling automaker at least $5,000m cash to play with. Quoting unnamed company sources and investment bankers, the Dallas newspaper said that the two companies had been holding merger talks since November, with British Telecom buying a stake of about 25% in the company.Electronic Data chairman Lester Alberthal was quoted in December as saying the company is open to making some sort of deal with communications companies of the size and stature of British Telecom. I think it would be obvious to anyone looking at us, and any other large information technology company, you’ve got to be able to have access to the communications networks, Alberthal said, responding to a question about how the $8,000m company planned to achieve its goal of growing into a $25,000m company by the turn of the century. While General Motors might well sell a stake in the company to British Telecom by issuing it with new General Motors Class E shares, which pay a dividend tied to the performance of Electronic Data Systems, it has made it clear that it regards the company as a core business, and is not interested in selling it outright. It is questionable whether British Telecom would regard the Class E shares as acceptable as they are shares in General Motors, not directly in the subsidiary. Any pending deal with Electronic Data would complicate the UK’s plan to sell the rest of its Telecom shares.
