BT is said to be reviewing its strategy to deal with a hostile takeover bid following reports that potential suitors are eyeing a bid following a fall in the company's share price. The UK's largest mobile and broadband operator is grappling with a major investment and restructuring programme, the effects of which have been exacerbated by the coronavirus pandemic. Investors were not as enthusiastic as they expected given the cost of the program, the decision to suspend dividends for the first time in the company's history, and the issuance of a warning. on profits.
BT sale discussion
Despite the belief that the changes will lead to significant cost savings and open up new revenue opportunities, BT's market capitalization has fallen to €10.1 billion. Meanwhile, in its most recent quarter, BT reported a 7% drop in revenue to €5,25 billion and a 13% drop in net profit. Some believe that private ownership would facilitate the implementation of the modernization strategy, away from market surveillance. Sky News says private equity firms estimate a deal worth €15 billion can be done and are investigating a joint bid. Deutsche Telekom has also been presented as a potential competitor due to the 12% stake it acquired in BT through the sale of EE in 2016. No interest has been expressed, but BT's board is said to be seeking the advice from your advisors at Goldman Sachs and can seek additional support should you need to reject any unwanted approaches. Either way, any acquisition would be politically difficult given the importance of communications networks to industrial strategy and national security. The government could seek to block the deal or impose legally binding commitments to continue BT's planned network rollout. Under its current plans, BT will connect 20 million premises to fiber by the end of the decade, cut thousands of management jobs and sell its St Paul headquarters. Instead, there will be fewer leadership roles with greater responsibilities and more jobs in engineering and customer service will be created. The changes are expected to save £1.300bn and allow the more streamlined and decentralized company to respond more quickly to market trends and get closer to customers. The convergence of fiber optic networks and 5G will also allow BT to offer new products and services. One solution could be the sale of a stake in Openreach. BT fought fiercely with regulators to retain ownership of its infrastructure division, but with a company valued at €20 billion, a sale could unlock the value of the Openreach division for investors and deliver a windfall. to BT shares and help finance the investment. in infrastructure that would generate long-term profits. BT has been approached for comment. Via Sky News