PARIS (Reuters) - French telecom giant Orange ORAN.PA said it had sold its remaining 2.5% stake in BT BT.L, raising net proceeds of 486 million pounds ($616 million) as the former state monopoly faces a battle for market share in France. .
BT bought 41 million shares in the private placement of France Telecom’s 248 million shares, a stake which was worth about 493 million pounds at Thursday’s market price.
Shares in BT were 2% down at 0720 GMT on Friday, while Orange was almost unchanged following the Thursday placement, on which Citigroup Global Markets was the sole bookrunner.
Orange ended up with a 4% BT stake in 2014 when the British group bought mobile operator EE, a joint venture between the French company and Germany's Deutsche Telekom DTEGn.DE.
Deutsche Telekom is BT’s largest shareholder with a stake of about 12%.
“Orange argues that it had no ‘strategic objective’ related to its BT stake and wished to sell out ahead of seasonally lower trading liquidity in the summer”, analysts at Jefferies said in a note to investors, adding that Orange has never been interested in leveraging an equity position into a strategic partnership in the way that Deutsche Telekom attempted.
“We certainly do not believe that Orange has special insight into BT’s prospects.. This feels like an Orange committee decision to tidy up holdings,” Jefferies said.
Orange’s disposal means it no longer has any exposure to BT and comes as BT undergoes a major restructuring under its new chief Philip Jansen.
This overhaul includes 13,000 job cuts and is aimed at tackling problems ranging from criticism of BT’s fiber broadband to an underperforming IT services business..
($1 = 0.7886 pounds)
Reporting by Inti Landauro and Justin George Varghese; Editing by Alexander Smith
Our Standards: The Thomson Reuters Trust Principles.