Business

BT shares surge on possible offer for company

India’s Reliance Industries said to be weighing up move

BT shares advanced as much as 9.5 per cent following a report that India’s Reliance Industries is weighing up a possible offer for the U.K.’s biggest phone company.

Mon Nov 29 2021 - 13:16

BT shares advanced as much as 9.5 per cent following a report that India's Reliance Industries is weighing up a possible offer for the UK's biggest phone company.

Reliance could make an unsolicited offer to buy into the company or even stake a claim for a controlling stake with some strategic shareholders open to cashing out at the right price, according a report by the Economic Times, citing people familiar with the matter it didn’t name.

A BT spokesman declined to comment.

Separately, the Mail on Sunday reported private equity firms and investment funds are assessing BT’s infrastructure division Openreach at valuations as high as £40 billion (€47 billion), citing unidentified people familiar with the matter. BT’s current market capitalisation is £16.4 billion.

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Takeover

The speculation follows Altice, led by billionaire Patrick Drahi, acquiring a 12.1 per cent stake in BT in June. A lock-up preventing Mr Drahi, BT’s biggest shareholder, from pursuing a takeover ends next month.

BT employs almost 700 people in the Republic where its business reported operating profit of €35.4 million in 2020 on sales of €374.2 million after paying an €85 million dividend to its parent.

The group also established a standalone subsidiary, BT Sourced, in Dublin earlier this year to manage its global procurement needs with £13 billion annual budget.

Takeover talk has increasingly surrounded BT in recent years. Last September the London-based carrier’s share price hit 11-year lows and that vulnerability had prompted the board to hire advisers.

Private equity firms including CVC Capital Partners had studied the feasibility of a takeover, according to people familiar with the matter.

Reliance previously weighed a bid for a different European carrier, T-Mobile Netherlands, Bloomberg reported in August. That group was ultimately bought by private equity firms Warburg Pincus and Apax Partners. – Bloomberg

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