Special report: Marconi loses signal
- Jul 04 2001 10:47:22
News
Marconi board under fire at annual meeting July 18, 2001
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At Marconi's annual general meeting, chairman Sir Roger Hurn attempted to defend the chaos that surrounded the group's profits warning this month, claiming the group had been "between a rock and hard place" when it suspended trading for an entire day while the warning was being prepared.
Simpson ready to brave Marconi general meeting July 17, 2001
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As Lord Simpson heads towards Marconi's annual meeting, he may be regretting his decision to stay on as chief executive.
Marconi battle to be aired at annual meeting July 15, 2001
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The battle for control of Marconi, previously conducted through secretive briefings behind closed doors, is set to spill over into a rancorous public debate at the company's annual meeting.
Marconi job cut details and US lawsuits emerge July 10, 2001
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The Manufacturing, Science, and Finance Union revealed further details of Marconi's UK job cuts as it emerged that the telecommunications equipment company also faced lawsuits from the US over the handling of its profits warning last week.
Marconi chief executive given temporary backing July 9, 2001
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Marconi scraps controversial share repricing plan July 9, 2001
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Marconi urged to search for new chief executive July 8, 2001
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Mayo ousted as Marconi shareholders flex their muscle July 6, 2001
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Marconi investors to demand top-level changes July 5, 2001
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Discussion
Where did it all go wrong for Marconi?
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Background
Hangover after the spending spree
Since Lord Simpson embarked on his vision of transforming GEC - the electronics and defence conglomerate he inherited from Lord Weinstock - into a focused telecoms equipment company renamed Marconi, shareholders have been on a rollercoaster ride.
He took the helm in 1996. Within two years he had decided to demerge the more dominant defence business into British Aerospace and focus on telecoms.
He went on to whittle away the £2.6bn ($3.6bn) cash pile he inherited on a series of telecoms-related acquisitions in North America. The group now has debts of about £3bn.
Initially, investors loved the change from a conservatively-managed conglomerate into a higher-risk telecoms equipment company and the shares soared from 309p to £12.50.
But as he prepares to stand down later this month, sentiment could hardly be more different.
The shares have fallen to 104p, less than 10 per cent of their value 10 months ago as the telecoms equipment sector has been ravaged by the hangover that followed last year's telecoms spending spree.
After saying that it would be relatively immune from the slowdown because of its geographic and business mix was less focused on North America, it warned that profits would be 50 per cent down on last year.
It has also set itself up for a clash with institutional shareholders over repricing share options for employees.
The company as argued that it needs to reprice the options in order to provide an incentive to retain staff. The original price was £16.03.
A vote is to be taken before the annual meeting on July 18.
Analysis
The worst may not be over for Marconi July 9, 2001
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Last week may have been a horrendous week for Marconi's shareholders, who saw the shares slide 59 per cent over the course of the week. But, as the dust starts to settle, is the worst actually over for them? There are some ominous lessons from the US, where rivals to Marconi, such as Nortel Networks and Lucent, have issued several warnings each. As Deutsche Bank puts it, "In other words, will this represent the first chapter of bad news rather than the whole book?"
Patriarch may have fired the final shot July 8, 2001
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Presenting easy pickings for predators July 8, 2001
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Comment: Staying on top July 8, 2001
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Marconi reaps the whirlwind of investor fury July 6, 2001
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A deal-maker undone July 6, 2001
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Heroic duo's reputation hit below waterline July 6, 2001
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Agonising choice that faced board July 6, 2001
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Customers warning of slowdown months ago July 6, 2001
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Marconi marches to new tune June 22, 2001
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Marconi starts assault on doomsayers April 11, 2001
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The wisdom of gatecrashing the US when bullish party is over April 7, 2001
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Lex columns
Lex: No time to sell July 8, 2001
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Lex: Heavy on the Mayo July 6, 2001
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Lex: Damsel in distress July 5, 2001
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Lex: Marconi July 4, 2001
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Resources
Chairman's letter to shareholders
marconi.com
Full text of trading statement
news.ft.com FT3RO5HQROC
Board of directors
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Telecoms earnings watch
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Technology job cuts watch
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Timeline: Clouds appear on mobile horizon
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Marconi shareprice
mwprices.ft.com
FT.com's telecommunications page
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Marconi website
marconi.com
© Copyright The Financial Times Limited 2001.
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