BT in talks to sell Openreach stake - report

BT shares rose after the company was reported to be in talks with potential bidders for a multibillion-pound stake in its Openreach infrastructure division.

Potential buyers of a stake in Openreach include Macquarie, the infrastructure focused Australian bank, and a sovereign wealth fund, the Financial Times said. Interested parties have held talks with BT in the past three weeks, the FT said.

The FTSE 100 company's shares rose almost 10% in early trading and were up 6% to 108.35p at 15:28 BST. Unlocking value in Openreach could be a way to revive BT's share price, which has fallen about 80% in the past five years.

Openreach, which maintains the UK's national telecoms network, could be valued at about £20bn – double BT's market value, people briefed on the talks told the FT.

A deal to sell a stake would free money for BT to pay for a £12bn plan to connect 20m homes to full fibre broadband by the end of the decade. Analysts have raised doubts about BT's ability to pay for the project. The company cancelled its annual dividend on 7 May for the first time since privatisation in 1984.

Openreach is a legally separated company within BT but it is fully owned by the former state monopoly. BT has considered spinning off Openreach, its most profitable division, before and has turned down approaches from financial investors.

Michael Hewson, chief market analyst at CMC Markets, said: "If BT is able to pull this deal off, and in some respects it really needs to if the UK is able to get the broadband infrastructure it needs, then we could well see a considerable uplift in the share price. The urgency is all the greater given last week's big deal between Telefonica and Liberty Global, as they look to compete with BT in the quad play space of home phone, broadband, TV and mobile contracts."