Ericsson and Alcatel bid for Marconi

SWEDISH telecoms equipment giant Ericsson and France’s Alcatel are neck-and-neck in the final stage of a contest to buy Marconi, according to weekend reports in the British press.

The Sunday Telegraph, which did not reveal the source of its information, said final bids for the beleaguered telecommunications equipment firm were due next Tuesday and a winner could be announced the same day. None of the three companies were immediately available for comment.

Britain’s last remaining telecoms equipment maker has said it is considering all strategic options after its future was thrown into turmoil in April this year when it lost a much-expected network upgrade contract from its largest customer, the phone giant BT.

Marconi confirmed last August that it was in takeover talks. The company, however, has never named its suitors.

Chinese telecoms equipment vendor Huawei Technologies, with which Marconi already has an agreement to sell the other’s products, was long considered the front runner to buy the company.

The Sunday Telegraph report also said Britain’s pensions regulator had ruled that the deficit in Marconi’s British pension fund was four times the £109 million (€158m) shown in its accounts and had ordered that the successful bidder must provide a legally binding covenant to meet that deficit.

The paper said it was unclear what impact the £400m (€592m) pension deficit would have on Marconi’s final takeover price.

Shares in Marconi, which nearly lost half their value in April and have recovered slightly on the back of the takeover speculation, closed 5.75% higher at 344.75 pence on Friday, giving the company a market value of around £723m (€1.07bn).