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Deutsche Telekom Boss Renews Speculation of UK BT Takeover

Wednesday, September 8th, 2021 (7:31 am) - Score 7,896
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The boss of German telecoms giant Deutsche Telekom (DT), Tim Hoettges, has renewed long-running speculation over their reported desire to gobble the BT Group by hinting that “something is going to happen” with their 12% stake within the next 12 months, before adding that they would do a “good deal” for the UK broadband firm.

For as long as we can remember, Deutsche Telekom has frequently been linked with speculation over a possible bid for BT, although potential suitors have often ended up being discouraged by various concerns over the operator’s complex regulatory position, uncertainties around the outcome of Brexit, challenges due to massive debt (£18.6bn) and pension (£50bn) liabilities, as well as various other issues.

NOTE: Back when BT and EE merged the company’s shares were worth 441p, but today they’re 164p and analysts believe that 200p would be more reflective.

However, the market and BT have gone through a number of key changes over the past year. For example, the BT Group (particularly its Openreach division) has gained some longer-term regulatory certainty from Ofcom, which has enabled them to dramatically expand their £15bn rollout plans for Fibre-to-the-Premises (FTTP) broadband technology (i.e. aiming to cover 25 million UK premises by December 2026).

On top of that, the recent UK and EU trade deal has helped to make the post-Brexit future easier to predict. Lest we forget, Altice UK (Patrick Drahi) also made a surprise move (here) to acquire a sizeable 12.1% equity stake in BT (worth c.£2bn), which is a similar size to DT’s stake. At the time, Altice UK said that it “does not intend to make a takeover offer for BT,” but few believe Drahi will be content to sit on his hands. Meanwhile, BT itself has been busy restructuring itself.

All of this may help to explain BT’s reported move last year to update their bid defence strategy (here), with the operator perhaps being mindful that they are now more accessible to a takeover attempt than they have been at any point in the past decade. This brings us back to what DT’s boss just told analysts.

Tim Hoettges, Boss of DT, said (Proactive Investors):

“In the next 12 months something is going to happen there around [our 12% stake in BT] because the shareholder side is changing rapidly … [but] it’s too early to make a decision. We are entertaining all options. We have a lot of optionalities now on the table in the BT business. We will do something which is a good deal.

We are today in a listening mode, we are not in an acting mode.”

In the short term, all of this renewed speculation will give BT’s share price a nice nudge, but in the long term, any takeover attempt would still have to grapple with the operator’s significant liabilities (see above). Not to mention that there will be uncertainty over how the UK Government, which has previously signalled their desire to protect key players in the British technology sector, might respond to a bid for BT due to their position within the UK telecoms market.

No doubt a lot would be demanded or expected of any potential buyer, and that in itself could act as a discouragement. Time will tell. For the time being we suspect that DT are merely testing the waters and perhaps waiting to see whether Altice UK, or others, decide to bite.

 

Leave a Comment
19 Responses
  1. Ray Woodward says:

    Well I defy DT to make a worst job of it than the eisting owners …

    1. André says:

      Be careful what you wish for…

  2. Aled says:

    Quite scary that BT need £1200 per UK citizen to break even on their debt/liabilities.

    No wonder their FTTP installs are so expensive.

    1. Fastman says:

      Building infrastructure is not cheap and pay back terms (in years) are eywatering

    2. JM says:

      Its not the payback terms which of of interest, its the value of the assets that matters when it comes to these matters. A market cap of around £12bn seriously undervalues BT as a whole considering it includes EE and soon to be built fibre network.

  3. framer George says:

    Ray, people might take you more seriously if you spell “existing” correctly.

    1. André says:

      It’s a typo. Spit happens 😉

  4. JM says:

    The government will sit back and allow different entities to take a share in BT, however I’m willing to bet say a nominal £1 that they won’t allow BT to be completely taken over by a foreign buyer. Given how deeply integrated BT is in the UK market and thus as a consequence UK Government providing critical communications in areas of intelligence and security….much like what I think will happen with ARM it will be blocked on those latter grounds.

    1. 5G_Infinity says:

      The provision of secure communication to government, MOD etc is a problem in one sense but then HP, Lockheed Martin etc are suppliers to GCHQ and so on. The US is in five-eyes, Germany isn’t.

  5. Mike says:

    Does this mean EE will be renamed to T-Mobile?

  6. SymetricalAccess says:

    Hell no. Can we keep at leat one British owned company please sir.

    This is pathetic. Foreign takeovers are the new front line. Protect ouselves and our companys before we have nothing left.

    1. Nick says:

      Deutsche Telekom wasn’t bad when they operated here before with both Eurobell and One2one/T-Mobile, they actually invest money into operations, things like customer services, something Virgin Media O2 haven’t got a clue about.

      I wad very happy with T-Mobile and that went south when they lost interest and created EE then selling up.

      Deutsche Telekom was one of the companies looking to buy O2 plc in 2005, if they succeeded, O2 and T-Mobile would have merged and Deutsche Telekom would have had the largest mobile network in the UK and Germany plus a near enough monopoly on the Isle of Man because at the time Manx Telecom was part of O2.

      However,I doubt Deutsche Telekom will go ahead with a full takeover and they will probably either give up their 12% share or increase it a little.

    2. SymetricalAccess says:

      What sort of job they would do is irrelevant. Losing ownership and control is the issue.

      All these idiots who voted to leave the EU and then justy sit back and let the whole conutry get sold off. It’s ridiculous.

  7. Buggerlugz says:

    Just waiting for some Chinese (party quango) to snap up BT.

  8. It's an OUTRAGE!!! says:

    We WON two world war, one world cup AND Brexit to be free from Jerry domination!

    This surrender makes me sick!!

    I say send in Sir Nigel to tell’em what’s what!!!

    1. Saying how it is says:

      The same Nigel that has German passports for his family?

      Think you need to take off your British sun glasses, you have lost sight of reality and how unimportant the UK is. Not to mention its breaking apart from the inside out.

    2. SymetricalAccess says:

      Nigel is a tool. Wish the queen would hang him for his hand in our EU exit.

      Any country however inportant they think they are or are perceived to be should protect themselves and their assets.

  9. Josh Welby says:

    Saying how it is is right

  10. Nick says:

    The UK does have companies across the EU and the rest of the world so the whole losing everything in the UK to foreign ownership is irrelevant, the amount of food and produce the British owned supermarkets like Tesco,Sainsburys,Morrisons and Waitrose underpay producers and suppliers across the world many of them developing countries which is very unfair and is borderline theft.

    Also by the way BT has a lot of foreign shareholders already like Altrice.

    As to the comment about idiots voting to leave the EU, that’s also irrelevant, it was the people voting for Margaret Thatcher that sold this country off at rock-bottom prices.

    Margaret thatchers government also failed to implement legislation preventing foreign investors owning entire British companies like BT, that government could have imposed a cap on the percentage of a foreign shareholder could own.

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