BT investor backs multi-billion-pound rights issue to finance mobile acquisition
A top-five shareholder in BT has come out in support of a rights issue to finance the acquisition of UK mobile companies O2 or EE, The Daily Telegraph reported. The unidentified investor said he would favour a cash call in the single-digit billions (GBP) as he would like the UK-based telco’s shares to remain liquid. He added, however, that he would be supportive of giving Spain-based Telefonica, the owner of O2, a partial BT stake if that would smooth negotiations over price, the item reported. It noted reports have suggested Telefonica might sell O2 in return for a 20% BT stake.
The shareholder stated that he had talked to the management team at London-listed BT recently and it was evident no options have yet been ruled out, the report said.
Financing bankers cited in the piece said BT’s options for funding a deal are already under discussion and a multi-billion-pound cash call would easily secure support.
Moody’s, the credit-rating agency, indicated that a cash-only takeover offer would probably result in a downgrade for BT from its current Baa2 rating, the item reported.
Daily Telegraph