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Orange plans to reduce its stake in British rival BT Group from 4 per cent to as little as 1.33 per cent, according to a company statement.
Shares in BT, Britain’s largest telco, have fallen by around 21 per cent 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 plans to initially lower its BT stake to 2.66 per cent 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 telco said it had launched an offering of four-year bonds exchangeable for BT shares on another third of its 4 per cent stake in the British group. That offering amounts to £520 million, reflecting a premium in the range of 35 to 40 per cent 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 per cent.