BT share price spiked: here are the two possible reasons

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on Feb 27, 2024
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  • BT Group stock price jumped by 1% on Tuesday.
  • Bloomberg reported that Charter was in talks to acquire Altice.
  • There are rumours that Vodafone has become an acquisition target.

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BT Group (LON: BT.A) share price rose by almost 1% on Tuesday even as London stocks remained in a tight range. The highly-embattled stock rose to 106.50p after falling in the last three straight days. It remains deeply in the red as it has dropped by almost 30% from its highest point in 2023.

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There was no immediate news from BT Group, which provided its trading statement on 1st February and its full-year numbers will happen in May. 

The most likely reason for the rally is that there are M&A rumours that, if confirmed, would have an impact on the company.

Altice may be acquired by Charter

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First, Altice (ATUS) stock price jumped by more than 36% on Monday after Bloomberg reported that Charter Communications had approached it. Altice was one of the best performers in New York on Monday.

Such a deal would join two highly-embattled cable companies that are struggling as the cord-cutting trend continues. Altice stock has fallen by over 33% in the past 12 months, bringing its total market cap to less than $1 billion. 

Charter stock, on the other hand, has dropped by over 24% this year, making it one of the top laggards in the S&P 500 index. It published weak financial results leading to several downgrades from analysts.

An Altice acquisition would have an impact on BT Group because of its ownership structure. Patrick Drahi, the French billionaire, is the biggest shareholder in Altice and BT Group. As I wrote last year, he was in a cash crunch and was considering selling off some of his assets.

Vodafone’s rumoured acquisition

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The other M&A rumours is about Vodafone, a London-listed company. Its stock has risen by over 7.25% from its lowest point as acquisition rumours continue. According to Betaville’s uncooked alert, Goldman Sachs and Jefferies have been hired to work for a deal.

These rumours have not been confirmed and the identity of the potential acquirer has not been revealed. Some analysts speculate that the potential buyer will be an American or European telecom company. This would be a big deal since Vodafone is valued at over £18 billion.

Vodafone’s acquisition would have some implications for BT Group, the biggest telecom company in the UK. Besides, it has also been a rumoured acquisition target for many years although such a deal has never been confirmed.

Still, fundamentally, BT Group is going through a rough patch as its revenue and profitability growth slows. Its most recent results showed that its total revenue rose slightly to £15.7 billion in the first nine months of the year. Its adjusted EBITDA rose by 3% to £6.1 billion.

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