chief executive Ron Sommer resigned from his posttoday, bowing to mounting pressure from the German government and thesupervisory board, which blame his boom-time tactics for the company'ssoaring debt and stock price decline.
In his place, the supervisory board appointed Dr. Helmut Sihler as theinterim CEO, "for a period of no longer than six months," as the companysearches for a permanent CEO. The decision is unexpected, as the board hasnominated company veteran Gerd Tenzer as a potential successor last week.
By Monday, however, the markets voiced firm dissatisfaction with Tenzer'spotential appointment, after hoping for more drastic turnaround measures. Sihler is also the former chairman of the supervisory committee, whichsought to remove Sommer.
Tenzer will instead serve as the deputy chairman of the boardmanagement, according to a company statement.
Deutsche Telekom American Depositary Receipts gained steadily throughthe morning in anticipation of his removal, up 35 cents, or 3.21% to$11.26. Shares surged higher on a day when most U.S.-based wirelesscarriers were lifted by early good news from
Sommer's decision to resign rather than face the ax ends anillustrious seven-year career, during which he reinvented the former statephone monopoly into a global telecommunications giant. Last year thecompany snapped up VoiceStream for an estimated $31 billion, drawing theire of shareholders when the telecom sector was obliterated this spring.
Last week, VoiceStream was named in reports as a potential mergercandidate with
in a deal valued at $10 billion. Some WallStreet analysts say Sommer's resignation may help speed the process as thecompany, which is 43%-owned by the German government, seeks to pare downdebt.
Deutsche Telekom lost $3.5 billion last year, and $1.81 billion in thefirst quarter. But what's got investors really steamed is the $66.7 billiondebt load it currently carries, the aftermath of Sommer's furiousacquisition binge.