The French telecom firm, Orange, plans to lower its wager in its British competitor BT Group from 4% to as minute as 1.33%, it said last week. Market stakes in BT Group, the biggest telecom operator of the U.K., have underperformed to those of its European peers lately, dropping by almost near to 21% from the time when it accounted scam in Italy and enforced the group to slash forecasts for the coming 2 years. Orange claimed to the media in a statement that it devices to firstly drop its BT Group share to 2.66% by trading almost 133 Million market stakes through a confidential placement.
BT Group is capable of purchasing 200 Million Pounds in the placement, fraction of which will go to its workers’ trust of share, Orange stated to the media. Parallely at the same period, the French company claimed that it had rolled out a scheme of 4-year bond negotiable for BT Group market stakes on another part of its 4% market stakes in the BT Group. That scheme makes a value of almost to 520 Million Pounds, indicating a premium in the range of 35% to 40% on top of the stake price set through the first confidential placement. If the agreements are completely exercised, the company’s market share in BT Group would then reduce to 1.33%.
The result of the placement and the problem of price for the agreements must be rolled out by next week at the latest. JP Morgan and BNP Paribas are acting as combined bookrunners on the deal. Well, this might really affect the global telecom market. Recently, Reliance Jio had a great impact on the Indian telecom market, which indirectly boosted the global telecom market. The low rates and unlimited service offered by the company was the main reason for its success.
And now, Orange’s decision will also have the same effect on the global telecom market. But one thing is for sure that the war between these telecom giant is indeed benefiting the users. For now, let us focus on the judgment that Orange comes up with regarding the price.