Openreach, a BT subsidiary that operates as a separate legal entity, has been the subject of interest stories from infrastructure and private equity investors for years.
However, news of a potential sale comes a week after BT cut billions of dollars in dividends as the telecommunications company pledged to invest £ 12 billion in network upgrades. UK broadband with next generation fiber optic connections.
Potential interested investors could include Australian bank Macquarie, which has been actively involved in the UK telecommunications scene for years, and an unnamed sovereign wealth fund, according to the Financial Times.
However, Reuters reported that a source close to Macquarie said it had shown no interest in Openreach and was not in talks with BT.
Openreach’s regular revenues from millions of broadband customers across Britain and its wholesale agreements with competitors such as Sky and TalkTalk make it a crown jewel for BT and highly valued as a potential target for outside investors.
However, the company finds itself in an unprecedented situation, leading to multi-billion dollar cost reductions affecting thousands of employees, while BT’s market value reaches lows never seen since the last financial crisis of 2009.
Offers to sell a potential stake in Openreach value it at £ 20 billion, according to the FT, double the market value of BT. Suddenly, a sale would cover BT’s financial problems, including a large retirement deficit and the enormous costs of nationwide rollout of fiber optic broadband over the next decade.
However, given the national strategic importance of Openreach, it would be a very political and complex decision, likely to require investigations by regulators Ofcom and the Competition and Markets Authority, before any agreement is likely to to materialize.
Public records released Thursday show that Philip Jansen, CEO of BT, bought nearly £ 2 million as a sign of confidence in the telecommunications company. The shares were purchased on Wednesday and there is no evidence that they were acquired with knowledge of a potential Openreach transaction.
Jansen, who made his fortune from his exit from WorldPay before joining BT last year, bought 1.8 million shares for just over £ 1 in a transaction announced on the stock market on Thursday.