BT share price: Decision on mobile deal expected by early next week

on Dec 12, 2014
Listen, Friday, December 12: BT Group Plc (LON:BT.A) is expected to decide which UK mobile network to acquire by early next week, as the respective owners of EE and O2 – the two options – step up efforts to sway BT’s decision. According to unnamed sources cited by Reuters, the potential sellers are open to accepting BT stock.

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Reuters reported yesterday that Cesar Alierta, the chairman of O2’s owner Telefonica, flew to London to help lobby for his side. The Spanish telecoms group was willing to agree on a deal that included taking some shares in BT, people familiar with the matter told the newswire. However, other sources had said yesterday that Orange and Deutsche Telekom were also open to such terms for EE, Reuters noted.
“BT is not expected to take much longer to choose between the two,” one of the Reuters sources said. “You can reasonably expect an announcement to be made by early next week, maybe as soon as this Friday.”
BT is currently in talk over the possible acquisition of either EE or O2, the UK’s largest and second-largest mobile networks, respectively. BT’s choice would depend on whether it is willing to pay more to acquire a higher quality asset, or settle with smaller rival O2, which was part of its business more than a decade ago.
In today’s trading, BT shares were 1.5 percent lower at 404.90p as of 10:51 UTC. The company’s shares have risen 6.6 percent since the start of the year.
According to the Financial Times, the 20 analysts offering 12 month price targets for BT Group plc have a median target of 455.00p, with a high estimate of 600.00p and a low estimate of 245.00p. The current consensus estimate suggests that the company will outperform the market. This consensus estimate has been maintained since November 5, 2013, when the sentiment of investment analysts improved, the FT notes.


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