Shares in BT Group PLC (LSE:BT.A) were up as much as 9% in morning trade after India’s Reliance Industries was cited as a potential bidder for the group.
The report came from the Economic Times, the country’s financial paper of record.
It reported that billionaire Mukesh Ambani's conglomerate may try to get a controlling share in BT, or that it may propose a partnership with Openreach that would bankroll the accelerated roll-out of fibre broadband.
The article prompted a mark-up of the stock, which has advanced around 19% in the past month amid consolidation talk.
The latest signs of M&A activity in the sector emerged last week when Telecom Italia found itself on the receiving end of a bid approach from buyout giant KKR that valued shares in the heavily indebted group at £9.3bn.
KKR’s move for TIM followed interest from France’s Vivendi, AT&T of the US and Spain’s Telefonica. Two profit warnings in three months rendered it vulnerable to predatory interest.
Returning to these shores, if Reliance’s interest in BT proves more than illusory then it comes at a crucial time for the UK telecoms group.
On 10 December the lock-up agreement barring billionaire Patrick Drahi’s Altice from bidding for BT expires.
With a 12% stake, Altice will no doubt have a pivotal part to play in deciding the future of the business.
At 10.15 am on Monday the shares were up 7.35p at 161.35p, valuing the business at £16.2bn.
Of the 23 brokers and banks following BT, 15 are positive on the prospects for the stock, with only four ‘negative’ on it (the remainder have neutral recommendations).
The consensus valuation is 194p, which is a 20% premium to the current share price.