The proposal made on 9 May is thought to have been an all-cash deal financed by debt

The proposal, made on 9 May, is thought to have been an all-cash deal, financed by debt. BT has been quick to play it down.Mark Lambert, an analyst at Merrill Lynch, one of BT’s brokers, said: “It is no surprise that when BT was at its nadir, they were poring over bits of BT thinking they might pick something up for a song.”A BT spokesman said: “Meetings did take place with these people We told them we had no interest in taking it further. We do have a duty to our shareholders to consider proposals from wherever they come and it was considered it [the Earth Lease bid] wouldn’t be beneficial.”Nevertheless, the Earth Lease consortium said it was still hopeful of restarting discussions with BT. A spokesman for Earthlease, which is thought to have had a management team ready should the bid have succeeded, said: “How can you ignore an £8bn bid for anything?”Analysts thought it unlikely that BT would entertain further discussions since debt reduction was now firmly off the agenda.

They also thought the consortium was raising the issue to force BT to negotiate. “These guys are playing a game and the game is to try to get BT back in the sin bin,” said one analyst, who did not want to be named.BT is thought to have written to the consortium last week, saying it had “a lot on its plate” and did not want to consider such a transaction at the current time.The major projects BT is still tackling include sorting out Concert, its loss-making joint venture with the US telecoms giant AT&T, and demerging its mobile phone arm BT Wireless, to leave it with a business known as Future BT. So far this year, BT has undertaken a £5.9bn rights issue and sold off assets around the globe.”At the end of the day, you’ve got to trust the management as to what they’re doing with this business,” said Steve Trowbridge, an analyst at SG Securities. He added: “It [the bid] would only have been a viable consideration if they could not pay the debt down elsewhere.”Future BT will comprise four businesses: BT Retail, BT Wholesale, containing the local loop, BT Openworld and BT Ignite. BT is thought to be leaning toward a demerger of the wholesale business in longer term and many analysts believe the asset would be better off in independent hands as it would help bring down the prices of high-speed internet access.

Some even thought the news BT had received a bid for the local loop business would put it under pressure to cut prices.Simon Hochhauser, chief executive of the video-on-demand firm Video Networks, believed that would be the case, saying: “If they don’t do it [cut prices], there’s someone else who can. This [the Earth Lease bid] is one proposal that is very exciting.”Having resolved the bulk of its financial problems, BT is clearly no longer a distressed seller. However, any proposal that would speed up the arrival of “broadband Britain” would be welcomed by industry and, on that basis alone, should not be dismissed lightly.. “Scientists discover extraterrestials floating in the air above our heads” could have been the mother of all announcements. Like many extraordinary claims, however, all that was lacking was the evidence to prove it. “Scientists discover extraterrestials floating in the air above our heads” could have been the mother of all announcements.