November 26, 2014 / 8:26 AM / 4 years ago

REFILE-UPDATE 1-EE owners confirm takeover talks with BT

(Corrects typographical error in spelling of “line” second paragraph)

LONDON, Nov 26 (Reuters) - EE’s German and French owners confirmed on Wednesday they were in talks to sell Britain’s biggest mobile network operator to BT as part of a wider review of its options.

Fixed-line operator BT said on Monday it was in talks with both Telefonica’s O2 and a rival operator about buying a mobile business. A source familiar with the situation had said EE, owned by Deutsche Telekom and Orange, was the other party.

Analysts believe EE, which holds 33.8 percent of the British mobile market in terms of service revenue and is the clear leader in 4G mobile broadband services, could cost BT around 10 billion pounds ($16 billion), while O2 with a 26.2 percent market share could cost it nearer to 9 billion pounds ($14 billion).

“Deutsche Telekom and Orange, the joint shareholders of EE, regularly analyse the development of the market in which EE operates, evaluating various strategic options which have the potential to create value for EE’s shareholders and strengthen the market position of EE,” they said.

“As one of these options, Deutsche Telekom and Orange are in exploratory discussions with BT, although it is too early to state whether any transaction may occur.”

Orange and Deutsche Telekom have previously looked at whether they should list EE on the stock market.

O2 was demerged from a heavily indebted BT via a share flotation in 2001 and subsequently bought by Telefonica in early 2006. A return to the mobile market now would give BT a strong position as the UK consumer telecoms market converges with single operators offering “multi-play” packages of fixed line and mobile broadband and pay-TV services. ($1 = 0.6367 pounds) (Reporting by Ludwig Burger and Kate Holton; Editing by Georgina Prodhan, Greg Mahlich)

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