UK fixed-line incumbent BT is preparing to raise a total of £5bn (US$7.8bn) through equity and debt financing to fund its £12.5bn (US$19.6bn) takeover of EE.
BT would look to raise £3bn via bond offerings and launch a £2bn rights issue to raise…
UK fixed-line incumbent BT is preparing to raise a total of £5bn (US$7.8bn) through equity and debt financing to fund its £12.5bn (US$19.6bn) takeover of EE.
BT would look to raise £3bn via bond offerings and launch a £2bn rights issue to raise funds from its existing shareholders, several of which have already given their support to the plan, according to sources cited in The Telegraph.
BT will assume EE’s £2bn debt pile and then issue new shares to the target’s owners Deutsche Telekom, worth £4bn for a 12% stake, and to Orange, worth £1.3bn for a 4% stake.
BT declined to comment on the report.
The two continental giants own EE 50-50, but Orange has chosen to receive a higher proportion of the consideration in cash to address its balance sheet. For its part, Deutsche Telekom is happy to be a long term investor in BT and keep its exposure to future growth in UK telecoms.
BT signed an exclusivity agreement with EE’s parents on Monday, picking the UK’s largest mobile operator instead of its rival O2, owned by Telefonica.
A binding agreement could be finalised in January. The regulatory process could then last anywhere from six months to a year. Providing the deal goes through it will create the UK’s first true quad-play operator.
