In­vestors plug into talk of swoop for BT

The Daily Telegraph - Business - - Business - LATOYA HARD­ING

BT LED the charge on the FTSE 100 yes­ter­day af­ter re­ports that it was strength­en­ing its de­fences against a pos­si­ble takeover fol­low­ing share price weak­ness.

The tele­coms com­pany has sought the ser­vices of Gold­man Sachs to update its strat­egy for de­fend­ing a takeover, ac­cord­ing to Sky News.

Since Jan­uary 2016 BT’s stock price has fallen by more than 75pc, be­com­ing a tar­get for com­peti­tors and in­vest­ment groups.

A move by a ri­val to take over the busi­ness, which is in charge of the £12bn drive to roll out su­per­fast fi­bre broad­band to 20m homes and will play a key role in build­ing the UK’s 5G net­work, would re­quire gov­ern­ment ap­proval.

Deutsche Telekom, which owns a 12pc stake, is seen as a likely can­di­date.

Neil Wil­son, of Mar­kets.com, said: “While BT has a lot of legacy bag­gage – no­tably £18bn in net debt and a ma­jor pen­sion deficit – it’s also got the Open­reach crown jewel, which would be worth con­sid­er­ably more on its own than the group is valued today.

“Of course, there is no for­mal of­fer, but shares could jump fur­ther if one emerges.” Shares ended 7.2p higher at 109p, a rise of 7pc, valu­ing the com­pany at £10.8bn.

It came as equity bench­marks in Europe fin­ished firmly higher on hopes for a coronaviru­s treat­ment. The op­ti­mism was driven by re­ports that Don­ald Trump, the US pres­i­dent, is look­ing to fast-track the ap­proval of a vac­cine be­ing de­vel­oped by As­traZeneca and Ox­ford Univer­sity.

As­traZeneca jumped 174p to £86.11 on the back of the news.

The FTSE 100 closed up 1.7pc at 6,104.7, with min­ing, en­ergy, bank­ing, air­line and house build­ing stocks all show­ing de­cent gains.

The Frank­furt Dax 30 and the Paris Cac 40 out­per­formed the FTSE 100, climb­ing 2.4pc and 2.3pc re­spec­tively.

Cineworld was among the FTSE 250 leaders, jump­ing 3.5p to 54.64p, af­ter Peel Hunt said the cin­ema chain presents “an at­trac­tive buy­ing op­por­tu­nity” for in­vestors with ap­petite for ma­te­rial risk. The bro­ker, which rates Cineworld at “buy” with a 180p price tar­get, re­it­er­ated its view that cin­ema de­mand should bounce back once ma­jor films are re­leased. “This starts this week with Tenet in the UK and in­ter­na­tion­ally, and next week in the US,” it said.

Peel Hunt noted that the Cineworld share price has fallen fur­ther than any other in its sec­tor cov­er­age, but said it should “bounce hard” once in­vestors are re­as­sured over de­mand.

Mean­while, Bri­tish-based out­sourc­ing busi­ness Equiniti fell af­ter Gold­man Sachs cut its price tar­get on the stock to 195p from 225p. It ended the day 1.4p lower at 111.2p.

Else­where, Amigo Hold­ings crashed by al­most a third as its board called on its founder to not push ahead with a se­ries of pro­pos­als, in­clud­ing call­ing a share­holder vote that could se­ri­ously shake up the way the em­bat­tled com­pany is run.

It shed 5.4p to 12.5p, a fall of 30pc.

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