BT shares jump as it ramps up defences against potential takeover
Shares in BT jumped this morning following reports that the telecoms giant has ramped up its defences against a potential £15bn takeover.
BT’s share price increased more than five per cent this morning after the firm took steps to strengthen its defences after its stock slumped to the lowest level in a decade.
Sky News reported yesterday that the telecoms firm had told Goldman Sachs to update its strategy to avoid a takeover from rivals and buyout firms.
The broadcaster also reported that the plans may involve boutique investment bank Robey Warshaw, a long-term adviser to fellow telecoms giant Vodafone.
The company has not yet received any formal offer. However any bid for BT would have political ramifications.
BT will invest £12bn to roll out superfast broadband to 20m households in Britain by the end of the decade.
It also has a key role in building the UK’s 5G network, from which Chinese telecoms firm Huawei was banned last month.
The firm has set aside £500m to strip Huawei’s technology from existing 5G networks by 2027, after the government changed its position over national security concerns.
According to analysts Deutsche Telecom, which already owns 12 per cent of the company, could be a potential candidate for a takeover approach.
Alexandra Brodie, telecoms partner at law firm Gowling WLG, said: “BT has been crowned the ‘comeback king’ due to key successes such as the roll out of BT Sport and the inevitable alliances and associations that come with such an offering.
“However, this journey is not over, if the share related sentiment of today is anything to go by the market continues to view them favourably, seeing them as a stronger prospect while continuing it alone and hopefully continuing to expand and enhance what was once a lack-lustre and old fashioned brand.”