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Continental telecoms `don't want Mercury'

Mary Fagan
Tuesday 02 April 1996 23:02 BST
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France Telecom said yesterday that neither it nor Deutsche Telekom would want to buy Mercury Communications in the event of a merger between BT and Mercury's parent, Cable & Wireless, writes Mary Fagan.

The flat rejection of any interest in the UK firm followed rumours that Deutsche Telekom, with which the French group has strong links, was BT's preferred buyer for Mercury.

The German company has already dismissed rumours as "pure speculation", but its partner went further yesterday by saying: "France Telecom, Deutsche Telekom and Atlas (the joint venture) do not have any interest in buying Mercury."

The divestment of Mercury, BT's main rival, would be inevitable if the pounds 35bn merger with C&W is to proceed.

The companies admitted last week that their advisers were in talks but have since refused to comment.

Shares in BT fell by 7p to 375.5p yesterday while C&W closed down by 9p at 529p.

NatWest Markets said the disposal of Mercury and C&W's mobile operation could raise around pounds 2.5bn; and that a merged BT and C&W could generate pounds 4bn pre-tax-profits in the year to March 1998.

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