BT shareholders vote for MCI merger

Show of hands joins 'world's best market defender' with 'world's best market attacker'

A show of hands consigned British Telecom to the history books yesterday after shareholders voted overwhelmingly to approve the planned merger with MCI of the US at an extraordinary general meeting in Wembley.

Around 620,000 of BT's 2.3 million small investors voted by post, with more than 90 per cent in favour of the pounds 13bn deal, the biggest in UK corporate history. Institutional investors, which own 74 per cent of BT, voted by 99.8 per cent to approve the merger.

A larger-than-expected contingent of 831 mainly retired shareholders turned up to yesterday's egm. When the vote came shortly after midday just a tiny scattering of hands were raised in opposition. The vote will change the name of the company from British Telecommunications to Concert.

Though several investors questioned the price of the deal and its benefits for UK consumers, there was no mention of possible executive bonuses or pay rises.

Sir Iain Vallance, BT chairman, described the merger as a "rite of passage" combining "a powerful mix of feistiness and stability". He said BT and MCI were "the world's best market defender coupled with the world's best market attacker".

The merger still requires clearance by the US regulator, the Federal Communications Commission and the European Commission. Sir Iain suggested the merger could be completed as early as the summer.

The egm was picketed by BT managers who used the session to announce an escalation in their campaign of industrial action over pay. Up to five BT offices in central London will be affected by a three-day strike starting next Wednesday, called by the Society of Telecommunications Executives. The union, which represents 18,000 BT managers, warned customer service could be affected.

People & Business, page 26