BT share price outlook amid persistent takeover speculation

on Sep 28, 2022
  • BT share price has been in a strong bearish trend in the past few months.
  • There are concerns about the company's growth prospects.
  • Most analysts believe that BT will become a buyout candidate.

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BT (LON: BT.A) share price has been in a strong bearish trend in the past few months even as speculation about the company’s acquisition rises. The stock has fallen in the past ten straight weeks and is now trading at the lowest level since February 2021. It has crashed by almost 40% from its highest level this year.

Will BT Group be acquired?

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UK companies have been attracting substantial bids from American companies and private equity firms in the past few months. Some of the names that have been acquired are companies like Melrose Industries, Morrison’s, and Avast among others.

International investors believe that UK companies are severely undervalued due to Brexit and worries about their competition. Most importantly, the British pound has fallen by more than 20% this year. This means that an American company would spend less amount in dollars to acquire UK companies. 

Therefore, BT Group has become one of the most talked about companies when it comes to being acquired. An informal survey of 18 fund managers and analysts believe that the firm has more chances of being acquired. Indeed, seven of the ten companies in the list are from the UK and they include names like Entain, Playtech, Burberry, anf Darktrace.

Chatter about its acquisition has been around for months. This speculation increased when Patrick Drahi, the head of Altice bought a stake in the firm. He now owns about 18% of the company and he is the biggest shareholder in the company. 

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Still, there are challenges to a potential deal. For example, BT is the biggest telecommunication company in the UK. As such, any bid will be assessed by the British government. In fact, the committee recently gave it a go-ahead to Patrick Drahi but warned that another review can be made if he adds to the stake. Another challenge is that BT has a mountain of pension liabilities.

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BT share price forecast

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BT share price

The weekly chart shows that the BT stock price has been under intense pressure in the past few months. It formed a triple-top pattern that is shown in green. At the same time, 25-week and 50-week moving averages have made a bearish crossover while the Awesome Oscillator have moved below the neutral level. 

Therefore, the stock will likely continue falling as sellers target the next key support level at 100p. A move above the resistance level of 135p will invalidate the bearish view.


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