Marconi chief executive Lord Simpson admitted this weekend that the troubled telecom company's recent share collapse has left it a vulnerable to a hostile takeover.
He said: "There are no talks with competitors at the present time. But with our share price where it is, I know we are vulnerable."
Analysts believe that any takeover bid would come from abroad. Anthony Miller, senior analyst at Ovum Holway, told vnunet.com: "So many of the large UK IT companies are in turmoil right now that it is difficult to see where a UK bid could come from. Marconi may be able to fix its own problems or may be bought wholesale."
Potential bidders include French rival Alcatel, which in May failed in an effort to merge with Lucent; and the US internet networking giant Cisco, which was thought to be considering a bid for Marconi as recently as last month.
Senior figures at Marconi have also added to the takeover rumours. A spokesperson said they hope to stabilise the share price and see "how the industry is shaping up and how Marconi can play a part in the consolidation process".
All telecoms firms, both abroad and in the UK, have been hit by a slowdown in IT spending. However, Marconi, after its shares bombed by more than half last week to close at just 105p, is currently worth one-tenth of its value nine months ago.
It denied that its sales were falling for a long time before finally warning of a significant slowdown in European business that meant 4000 job cuts last week.
This prompted angry shareholders to force the resignation of finance director and chief executive-designate John Mayo after other directors claimed he had kept them in the dark over the firm's true position.
Marconi has closed ranks and insisted there will be no further bloodletting, which will disappoint those shareholders who believe Lord Simpson should follow his deputy Mayo out of the door.
Simpson, set to retire at 60 next July, is likely to stay on and search for a replacement.
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