Running Scared

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What's going on?

BTs being pursued by an unwanted $20 billion acquisition, and the telecoms giant isnt taking it lying down.

What does this mean?

BTs had a rough few years, what with the ever-increasing costs involved in upgrading its broadband infrastructure. And once the pandemic was added to the mix, the company had little choice but to admit its earnings were at risk as well as to cut its dividend for the first time ever. Thats now reportedly encouraged a few private equity firms to consider bids to take over BT, perhaps in hopes itll be able to modernize more successfully away from public eyes.


BT isnt okay with these potential bids, and its asked investment bank Goldman Sachs to help fend them off using so-called raid defense tactics. Those might include a poison pill which keeps the would-be buyer from taking full control of the company or even a white knight, which involves finding a different buyer BT wouldnt mind pairing up with.

Why should I care?

For markets: Ja, BT!


Some investors reckon private buyers would pay double BTs current valuation of $13 billion, and some analysts think its worth even more which might be why BTs stock rose 5% on Monday (tweet this). It may even end up going higher if other potential buyers like Germanys Deutsche Telekom, which already owns 12% of BT start sniffing round. Of course, theyll have to decide if they want to cover BTs expensive pension first, not to mention the UKs telecoms regulators serious costs



The bigger picture: Politicking timebomb.


It gets trickier: any buyer would likely be held to BTs commitment to spend $16 billion on a UK-wide superfast broadband rollout, and may also be forced to promise not to cut jobs. And even then, the countrys government might not take kindly to potential foreign ownership: you just need to look at the Huawei ban to see telecoms at the forefront of its national security agenda.

Originally posted as part of the Finimize daily email.

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