MARCONI AND EASTERN

Evening Post, Volume CV, Issue 106, 7 May 1928, Page 9

MARCONI AND EASTERN

FUSION OF INTERESTS PROVISIONAL AGREEMENT - (From "The Post's" Representative.) LONDON, 21st March. An important announcement of a provisional agreement for a fusion of- interests has been issued by the Last- J crn and Associated Telegraph Companies and Marconi's Wireless Tele- ! graph Company, Limited. The statement, which is signed by Sir J. Denison-Pcndcr and Lord Inverforth, runs:-— An arrangement has been provisionally arrived at, on the lccoiumendntion of Sir Williamm Pender and Sir Gilbert Garnscy, between iho boards of the Fasteru aim As~sociated Cable Companies and tho Marconi Wireless Telegraph Company for a fusion of interests through tho medium of a proposed holding company, subject, to a satisfactory agreement being made with tho British Government and the Governments of tho Dominions and India, and aljo to acceptance by the stockholders and shareholders of the companies concerned. . No announcement of the terms of tho arrangement can be made in tho meantime, as its consummation is dependent upon tho conditions above mentioned. The conclusion of tho provisional agreement was foreshadowed by the excited market in Marconi shares on the Stock Exchange. When activity was "revived in the shares it was thought to bo simply a reflex of the Radio Corporation boom in New York. Only later, when rumours became persistent, did the market realise that the advanco in the shares was based upon something more solid. Tho activity became intense after official hours in the street, when the shares changed hands in thousands. An enormous arbitrage business was done with New York, and appropriately enough the wireless telephone was called iuto use in this connection. The price closed one day at 00s. In the House it opened on tho following day at 02s. Influenced by' steady buying tho figure rose to 67s (id. This wtis a new high record for tho House, but in the subsequent excitement in the street, where dealings continued until after C o'clock, the shares finished at 70s 3d, a gain of 10s ild on the day, while dealings were stated to ' have taken place up to 71s. There was thus a rise of lis on tho da v. The debentures, which- carry conversion rights, closed 24 points higher at 190. The announcement does not como as a surprise to financial circles,, for ever since the Cable and Wireless Companies agreed, at the invitation of the Government, to enter a conference, it has been taken for granted that both sides would see the obvious advantages of co-operation rather than competition. On the one side the 'Marconi Company Jiad its new beam system, which enabled it to cut into cable business severely on the most remunerative route, but on tho other the cable companies possess their ample invested reserves, built up from the result of years of profitable working, and they could have put up a keen fight to retain traffic even at a loss to themselves and their competitors.