BT's profits will take a pasting when it merges with MCI, and it should abandon the deal, warned analysts at City investment firm Dresdner Kleinwort Benson at the weekend.
The institution predicts that an unmerged BT will enjoy pre-tax profits of #3.4 billion in 2000, but this could be reduced to #3.2 billion, if MCI's forecasted losses are included in the combined companies' balance sheets.
The analysts calculated that BT's pre-tax profits this year could be #2.8 billion - including the #500 million windfall tax levy - rising to #3 billion next year, and #3.4 billion in 1999 to 2000.
However, pre-tax profits for Concert, the merged organisation, would be #2.99 billion this year, rising to #2.92 billion, and #3.2 billion in 2000. In the past, Dresdner has suggested BT should abandon the merger and look at alternatives.
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