BT on Thursday unveiled details of a £1 billion share placing that will be used to partly fund the company’s planned acquisition of UK mobile operator EE for £12.5 billion.
The former incumbent said in a regulatory news announcement that the placing is being conducted through an underwritten accelerated bookbuilding process.
BT said the £1 billion in funds that it plans to raise represents about 3% of its outstanding share capital. It noted that the net proceeds of the proposed placing are to be used to fund part of the cash consideration payable in connection with the EE acquisition, but said the placing is not conditional upon completion of the acquisition.
In other words, if the acquisition does not complete, BT intends to use the proceeds for general corporate purposes.
The group, which this week also committed to spend £960 million on live Premier League football broadcasting rights over the next three years, last week agreed definitive terms with Deutsche Telekom and Orange on the acquisition of EE.
The £12.5 billion deal would pave the way for the French and German telecoms giants to exit the UK mobile market and for BT to redefine itself as a provider of converged fixed and mobile services.
BT said it expects to achieve combined operating cost and capex synergies of around £360 million per annum in the fourth full year after the completion of the acquisition. This is equivalent to a net present value of around £3.5 billion before integration costs or around £3 billion after integration costs, the company noted.
The acquisition is now going through merger clearance process, with key focus points expected to be the combined spectrum assets of BT and EE as well as BT’s dominant position as a provider of mobile backhaul services on its fibre network. It is expected to complete before the end of BT’s financial year to the end of March 2016.
