BT Insider Buying Brings Skepticism to Deal Talks, Say Analysts

(Bloomberg) -- BT Group Plc rose as much as 10.3% in Friday trading after the Financial Times reported it’s held early stage talks to sell a multibillion pound stake in network unit Openreach. But analysts quickly said any discussions can’t be live or serious due to insider trading rules.

London-based carrier’s Chief Executive Officer Philip Jansen bought 2 million pounds in shares on Wednesday. Other board members and close associates bought hundreds of thousands of shares the same day too, according to a stock market filing on Thursday, meaning they can’t hold insider trading knowledge.

“We conclude that the story is false, or at the least, that talks are very early stage and that the approach is not being taken seriously,” said Berenberg analyst and BT’s former head of investor relations Carl Murdock-Smith, citing the share buying.

Barclays analyst Maurice Patrick said the share purchases “imply an imminent sale is unlikely.”

Read More: BT in Talks to Sell Stake in Network Unit Openreach, FT Says

Jefferies analyst Jerry Dellis agreed: “We wonder how that transaction could have been authorized if BT were at the same time engaged in non-public negotiations of such a material nature, even at an early stage.”

Spinning out or selling a stake in Openreach is a long-running subject of speculation, and Bloomberg reported investor interest in 2018. But BT management has repeatedly poured cold water on it. When asked about it last Thursday, Jansen said “the answer is: not now.”

The unit could be valued at 20 billion pounds ($24 billion) and Macquarie Group Ltd and an unnamed sovereign wealth fund are potential buyers, the FT said, citing people close to the discussions. Both BT and Macquarie declined to comment. BT’s shares yesterday sank below 1 pound per share, hitting 11-year lows.

©2020 Bloomberg L.P.