Mobile Operator Orange is Selling Most of its 4% Stake in BT

Mobile operator Orange has announced that they intend to reduce their 4% stake in the embattled UK telecoms giant BT, possibly pushing it down to just 1.33%. The stake itself was created as part of BT’s £12.5bn merger with EE, which was previously owned by Orange and Deutsche Telecom.

As part of that deal Orange was given a 4% stake in the new business (plus around £3.4bn in cash) and EE’s other parent, Deutsche Telecom, ended up holding 12% with a seat on the board. However it’s fair to say that the first half of 2017 has proven to be very difficult for BT (Ofcom’s strategic review, various fines, the pension deficit and an Italian accountancy scandal) and as a result the operator’s share price has taken a big tumble.

The French operator had originally pondered selling down its stake at the start of this year, although the rocky ride of the past few months appears to have delayed their plans. Nevertheless the plan now is to first cut their stake to 2.66% by selling millions of shares (private placement) and they’re also launching 4-year bonds, exchangeable for BT shares, on another third of their holdings.

Apparently BT is expected to buy back up to £200m in the placement and some of this will go to their employee share trust.