BT shareholders to vote on share buy-back

BT shareholders will tomorrow vote on the company buying billions of pounds worth of its own shares.

According to analysts, the vote sends a message to shareholders that if it doesn't find an attractive takeover target in the US, BT will hand back some of its cash stockpile to investors.

With WorldCom's purchase of MCI nearing completion, BT will soon be sitting on $7bn (£4.4bn) less tax - its payment for selling its 20 per cent stake in MCI.

A BT spokeswoman told Silicon News: "At the time of our annual results in May we said we'd be seeking shareholder authority [to buy back shares]. We haven't said we'll do it, but it would give us greater flexibility."

A large-scale buyback is also likely to boost the value of BT's shares, and make any takeover of the telco - an almost unthinkable proposition even a couple of years ago - more expensive.

However, Steve Wallage, a Dataquest analyst, said: "A share buyback wouldn't make that much difference - any company would still have to pay well over £50bn, and you have to remember WorldCom will have paid less than half of that for MCI."