Orange reduces its stake as BT shares flounder
French telecom operator Orange has negotiated the sale of about one-third of its stake in BT, which is dealing with the aftermath of an accounting scandal and trying to right its ship.
Orange called the transaction a “balanced approach which allows it to reduce [its] exposure to BT Group, while keeping exposure to a potential future share price increase through its residual stake.”
BT stock is currently trading around $18 per share and has been steadily losing ground since peaking at more than $35 in late 2015. The company discovered an accounting scandal in its Italian operations earlier this year that have impacted its projected profits, and it announced in May that it would cut 4,000 jobs from its global services unit. BT also recently was fined by British telecom regulator Ofcom — a record fine of about 42 million pounds, or $53 million — for not installing high-speed internet connections in a timely manner and then avoiding paying compensation to rival telcos over the infrastructure delays.
Orange’s stake in BT dates back to the 4% stake it received when co-owned carrier EE became part of BT in 2016. Orange said that it sold 133 million BT shares, through a combination of sales to other investors and about 69 million shares purchased by BT and its Employee Share Ownership Trust. That represents about 1.33% of BT’s shares and generated about 383 million GBP, Orange said.
