BT Group PLC (LON:BT.A) saw its shares jump higher on Tuesday morning after a media report suggested that Germany's Deutsche Telekom was looking at a takeover bid for the UK telecoms provider, although the spike proved short-lived.
In early afternoon trading, the FTSE 100-listed firm’s shares were 3.6% lower at 253.50p, having earlier hit a session peak of 267.10p.
READ: BT's turnaround plan pays off but challenges remain for incoming boss
The Financial Times website’s Alphaville column said there had been conjecture from multiple sources that Deutsche Telekom "has recently been working with advisors" on a full takeover of its UK rival.
The report added that Deutsche Telekom and BT directors have also held discussions "very recently", but cautioned that the rumours were emanating from the "darker corners of the market".
Last week, BT reported improved first-half profits, thanks to its massive restructuring programme put in place by departing chief executive Gavin Patterson before he leaves at the end of January.
However, the UK firm’s incoming CEO Philip Jansen – the former boss of Worldpay who oversaw its US$10bn merger with US e-commerce platform Vantiv - who will join the company on January 1, is unlikely to make too many big initial changes, according to analysts.
UBS stays 'neutral'
In a note to clients, published today, providing some second thoughts on last week’s results from BT, analysts at UBS said: “We think the appointment of Philip Jansen as CEO will lead to limited strategic changes, at least initially. The new CEO will only start in February 2019 and any strategic review will likely take six months, meaning notable changes to the strategy would only affect FY-21.”
They added: “On strategy, we think an incoming CEO would have to consider whether: to push harder on convergence in Consumer or scale back BT Sport; to spin off Openreach or push harder on FTTH rollout; to divest or scale back GS more aggressively.”
UBS repeated a ‘neutral’ rating and its 210p price target on BT shares.