Last night news broke that BT is set to be a likely takeover target for Deutsche Telekom according to senior industry executives and city analysts.
Speculation of a potential deal emerged as the German outfit is in advanced talks to merge its American arm, T-Mobile US, with the satellite pay-TV operator Dish Networks. If a deal is completed the likelihood of a BT takeover will increase.
Having previously struggled in the US market the T-Mobile Dish merger could be seen as a route to exit the American market. Concentrating their efforts in Europe with BT would go a long way to Deutsche Telekom realising their ambitions to join up their networks across international borders.
BT’s equity is currently valued at £37bn, having gained 40pc in the last two years as the company has benefitted from its broadband network upgrade and attacked Sky’s pay-TV dominance.
The Germans are already due to become major shareholders in BT following the completion of its £12.5bn takeover of EE, expected early next year.
Under the terms of the EE deal, Deutsche Telekoms stake in BT cannot exceed 15pc for three years following completion, meaning it cannot initiate a deal until 2019.
A senior industry source claimed: “Deutsche Telekom is clearly is selling out of the US and clearly they don’t want to give the money back to shareholders, they want to use it in Europe. They want to buy BT.”