British Telecom chairman Iain Vallance presently has little to say today concerning speculation that BT is seeking to renegotiate the financial terms of its planned merger with MCI and may ask two MCI executives to step down.
At a shareholders meeting in Edinburgh, Vallance told attendees only that BT would work together with MCI "to decide how best to respond" to the changes that MCI has undergone.
Vallance wouldn't comment on whether BT would seek the resignations of MCI CFO Doug Maine and President Tim Price. In the past week press reports have alleged that MCI officials were angry that BT hasn't offered it more support, or publicly refuted the rumor about asking for the resignations.
Vallance skirted around the issue, telling shareholders that "the U.S. market and our relationship with MCI continue to be strategically important for BT."
The speculation began last week after MCI announced on July 10 that it would take a financial loss of nearly US$800 million this year in its local services business - nearly twice what it had predicted. BT then said it would seek an investigation into what went wrong. Then came reports that BT would force the resignation of two top-level MCI executives and might ask for a renegotiation of the price it had agreed to pay for MCI.
Despite these allegations, BT executives have been quiet and refused to offer firm statements denying the allegations, saying only that no conclusions have been reached on the next course of action.
But since BT never said it would ask for the two MCI executives' resignations, it won't comment any further on the subject, a BT spokesman said at the Edinburgh shareholders meeting today. The same rule applies to the idea of BT asking for a redesign of the merger contract, he said.