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BT soars after CFO quits
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October 6, 2000: 11:23 a.m. ET
Shares of UK telecom operator jump after Finance Director Brace resigns
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LONDON (CNNfn) - Cellar-dwelling shares of British Telecommunications PLC were jolted up nearly 13 percent Friday after the U.K.'s former monopoly telephone operator announced Finance Director Robert Brace would resign.
BT (BT-A) jumped 49.5 pence, or 7.2 percent, to 738, the best performance in a declining FTSE 100 index, and lifting the company's market capitalization to about £44 billion ($64 billion). The volume of shares traded was more than three times BT's daily average. The stock rose as high as 775 pence, or 12.8- percent, shortly after the announcement.
Earlier in the day BT had fallen to a 52-week low at 667 pence.
Shareholders have been calling for Brace's head since BT shocked investors with disappointing third-quarter results earlier this year. Brace was accused of a poor performance in the field of investor relations.
"The market is fairly pleased at the moment," said Iain Daly, a telecom analyst at Charles Stanley & Co. "The market has been beating BT over the head for its perceived lack of vision about how to maximize shareholder value. He has been associated with senior management. This indicates that the old guard may be changing and may be a sign the strategy is changing as well."
BT said recently it was working towards expanding its alliance with U.S. telecom sector laggard AT&T Corp (T: Research, Estimates), an ex-monopoly like BT. The two are partners in Concert, their international joint venture. Analysts have speculated that the companies will try to merge either their long-distance or mobile-phone businesses.
Deal-maker steps in
Brace, 50, is to be replaced by 47-year-old Philip Hampton, currently the finance director of BG Group (BG-), a U.K. gas production and transportation company.
Hampton, who has been a mergers and acquisitions expert for accounting firm Coopers & Lybrand and an executive with investment bank Lazard, brings deal-making savvy to BT.
"They need a deal maker in the organization; a deal is the only way forward for BT," said Daly.
Once Britain's largest phone company, BT has stalled as upstart cable operators and business telecom providers take a bite out of its traditional fixed-line phone business. At the same time, nimble mobile-phone companies such as Vodafone Group (VOD) - now Europe's most valuable telecom company - have sped far ahead of BT in that fast-growing market. 
-- from staff and wire reports
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