UK telecoms giant BT (BT.A) jumped to the top of the FTSE 100 leader board on Monday following weekend reports that it is steeling itself to fight off potential takeover offers.
Speculation emerged on Saturday that the group has engaged bankers at Goldman Sachs to put together an updated buyout defence package if industry or private equity buyers make a bid.
BT’S BIG SHARE PRICE JUMP
BT’s share price jumped as much as 8% in early trading on Monday before easing back. At midday the stock was changing hands at 107.3p, almost 5.5% up on Friday’s 101.8p close.
That values the group at approximately £11 billion, barely a quarter of its value of five years ago when the stock traded at more than 400p.
BT is committed to funding a £12 billion investment programme to roll out superfast fibre broadband to 20 million premises across the UK by the end of the decade, but analysts have previously argued that the value creation of the scheme remains unclear.
‘Investors appear to see extra fibre investment currently as little more than extra cost,’ said Numis’ telecoms analyst John Karidis in June.
The group also has a crucial role to play in the UK’s 5G mobile network rollout.
OLD HAT RUMOURS
BT has been mooted as a possible buyout target several times over the past few years, not least because German peer Deutsche Telekom owns a 12% stake in the business, a leftover from its £12.5 billion sale of mobile arm EE to BT in 2015.
Private equity firms are also thought to be looking closely at BT and its assets, although the weekend reports suggest that BT has not yet received a formal approach from any potential suitor.
