Shares in beleaguered British Telecommunication Plc took another dip on Monday as the stock went ex-dividend, dropping 47.5 pence to just 379 pence. BT’s shares have fallen more than 10% since its proposed merger partner, MCI Corp, announced a surprise profits warning in July, wiping millions from both company’s values. But up until today, BT’s share price has been artificially supported by the forthcoming 47 pence cash dividend. With the record date now passed, all the fund managers who have been dying to get rid of the stock have dropped it like a hot brick. But the damage isn’t as bad as some in the city were predicting, and the fall has so far been limited to the dividend value alone. Meanwhile, shareholders are still stuck in BT’s information blackout regarding the terms of the impending merger. Institutional investors with sufficient muscle continue to call for a re-negotiation of the terms to correct the #12,000m price downwards, possibly by as much as 15%. Others are calling for a complete halt to the deal, in which BT’s management team seems to have been comprehensively outmaneuvered. British Telecom is carrying out a full review of MCI’s business, and a report is due at the end of this month. But there seems to be very little room left for bargaining and BT is looking increasingly like a fox with its leg stuck in the poachers’ trap, facing the unpleasant decision of whether to lose a limb in an effort to get away.
