BT soars as it hits £1bn cuts target ahead of schedule

BT shares surged after it hit a milestone cost-cutting target 18 months ahead of schedule.

The telecoms group was the biggest riser on the FTSE100 after it confirmed weekend reports that it has already slashed costs by £1bn – a goal it was planning to reach by 2023.

The move could strengthen its defence against a potential takeover offer from French billionaire Patrick Drahi.

And it comes ahead of BT’s third-quarter results on Thursday. Shares surged by as much as 7pc – but pared gains to close up 4.4pc, or 6.1p, at 145p.

Drahi became BT’s biggest shareholder when his telecoms group Altice took a 12.1pc stake worth £2bn in June.

French multinational telecommunications giant Altice, which has its headquarters in Amsterdam, is bound by City rules not to make a takeover bid for six months – but this expires in December and the company is bracing to fend off an approach.

BT boss Philip Jansen knuckled down on a sweeping modernisation of the company last year, when he set the target to save £1bn by 2023 and £2bn by 2025. The group is now thought to be mulling whether to increase these goals – though some senior figures are keen to wait to see if 58-year-old Drahi puts forward an offer before making any changes. BT has already hired boutique investment bank Robey Warshaw, which employs George Osborne, to beef up its defences in case Drahi launches a hostile bid.

Jansen, formerly boss of payment processing group Worldpay, took over at BT in early 2019 and inherited a modernisation plan started by his predecessor, Gavin Patterson, to cut 13,000 jobs and plough money into broadband infrastructure.

Shares have plunged by more than a third since 54-year-old Jansen replaced Patterson.

And his tenure has been marred by the surprise exit of chairman Jan du Plessis, who left abruptly earlier this year amid reports of a rift with his chief executive.