BT in talks to sell its stake in Openreach

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Sale is to help finance the £12bn extension of BT’s full-fibre network

BT is in talks to sell its stake in its Openreach division to infrastructure investors to help to finance the £12 billion extension of its full-fibre network.

Potential buyers include Australian bank Macquarie and a sovereign wealth fund.

Openreach, which maintains the UK’s national network, is the most profitable division within BT and the potential stake sale could value the unit at about £20bn, said people close to the matter. That is double BT’s market capitalisation, which on Thursday May 14 sank to its lowest level since 2009.

Talks are yet at an early stage and the mechanism by which investors would buy a stake in Openreach remains under discussion.

BT, which operates the country’s largest broadband and mobile phone networks, considered spinning off its network division more than a decade ago but decided the business remained more valuable as a whole.

BT’s value has fallen 80 per cent over the past five years and has continued to fall as BT decided to cancel its annual dividend last week for the first time since it was privatised in 1984.

The group has pension liabilities of more than £50bn, net debt of £18bn and expects to spend £1.3bn restructuring the company over the next five years.

Openreach’s full-fibre network covers 2.6 million homes but it intends to speed up its reach over the coming years to about 3 million a year.

Shares in BT rose 9 per cent this morning.


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