PARIS French telecoms company Orange plans to reduce its stake in British rival BT Group from 4 percent to as little as 1.33 percent, it said on Monday.
Shares in BT, Britain’s biggest telecoms operator, have underperformed those of its European peers of late, falling by about 21 percent since the start of the year after an accounting scandal in Italy forced the group to cut forecasts for the next two years.
Orange said in a statement that it plans to initially lower its BT stake to 2.66 percent by selling about 133 million shares via a private placement.
BT would buy up to 200 million pounds in the placement, part of which would go to its employee share trust, Orange said.
At the same time the French group said it had launched an offering of four-year bonds exchangeable for BT shares on another third of its 4 percent stake in the British group.
That offering amounts to 520 million pounds, reflecting a premium in the range of 35 to 40 percent above the share price set via the initial private placement. If the bonds are fully exercised, Orange’s stake in BT would then decrease to 1.33 percent.
The outcome of the placement and the issue price for the bonds should be announced by Tuesday at the latest.
BNP Paribas and JPMorgan are acting as joint bookrunners on the transaction.
(Reporting by Mathieu Rosemain; Editing by Edmund Blair and David Goodman)