BT rallies as private equity firms said to consider takeover

BT shares rallied on Wednesday following a report that its executives are working with advisers to defend against potential takeovers and approaches from activists following a slump in the share price.

BT’s shares have fallen 43% so far this year and 33% over the last year.

Bloomberg cited people familiar with the matter as saying that private equity firms, including CVC Capital Partners, have looked into the feasibility of a takeover of BT.

CVC, for example, has considered teaming up with German telecoms group Deutsche Telekom, which is BT’s biggest shareholder, Bloomberg said.

A spokesman for the company told Bloomberg that BT is going through a period of significant change and investment, with its focus on long-term value creation. He declined to comment on takeovers or political matters.

"I think there an absolute tonne of private equity money sniffing all around lots of UK equities - so expect more deals this autumn," said Markets.com chief market analyst Neil Wilson.

"And BT has a lot of valued tied up in OpenReach that is not fully realised so there is value in there that is not reflected in the share price.

"I think there are signficant regulatory concerns and a lot of legacy issues re debt and pensions, but ultimately it might be a goer should the offer meet all the requirements."

At 1540 BST, BT shares were up 5.9% at 110.33p.