BT’s share prices have jumped after it was revealed that the board was preparing to defend it against possible takeover bids.
According to Sky News, BT has asked Goldman Sachs bankers to update its bid defence strategy, with the group’s market capitalisation at just £10.1 billion.
Sky also reported that boutique Robey Warshaw may also be approached to help stave off a takeover. Currently, no company has made a formal takeover attempt.
Any takeover approach will be seen as controversial given Openreach’s planned £12 billion investment into the UK’s fibre rollout by the end of the decade.
“This morning we note the strong gains in BT’s share price, up in excess of five per cent at the open which follows on from a period of sustained weakness and the shares more than halving over the last two years,” said The Share Centre investment research analyst Helal Miah.
“No bidders have been identified but any potential bidder may be attracted by the fact that individual businesses such as Openreach are valued far higher than the sum of the parts of £10bn with potential bidders coming from the private equity industry. Deutsche Telekom is seen as a likely candidate given its 12 per cent stake in BT following the deal several years ago for EE mobile network.”
BT shares have fallen since the start of 2020 over concerns at the cost of broadband expansion, and revenue declines brought on by the coronavirus pandemic. CEO Philip Jansen promised not to make any redundancies for at least three months in April, and donated six months of his own salary to charity.
