Orange lockdown on BT share sale expires

James Pearce
Published on:

French operator is now free to sell its 4% stake in the British operator a year after it sold its 50% share of mobile operator EE

French operator Orange is free to sell its 4% stake in BT after the expiry of an agreement preventing a sale during the first year of the British incumbent’s ownership of EE.

Orange had owned a 50% stake in EE along with Deutsche Telekom, but sold the UK’s largest mobile operator to BT in a £12.5 billion deal last year.

As part of the sale, Deutsche Telekom took a 12% stake in BT, while Orange took a smaller 5% stake but a higher cash payment.

Part of the agreement meant Orange was prevented from selling its stake within 12 months of the sale, which was completed on 29 January 2016, meaning the French firm can now offload its shares.

Those shares have seen a significant decline in value since the EE sale, driven by the falling value of the pound in the aftermath of June’s European Referendum, and problems arising from BT’s Italian arm.

The problems in Italy stems from an overstating of earnings, and led BT shares to drop 21%, meaning Orange’s stake, initially worth an estimated £1.7 billion, has fallen around 27% in value overall.

Deutsche has also been liked with possibly selling its stake following the UK Brexit vote, however the German operator is also rumoured to be considering a takeover of the UK giant. Deutsche agreed to an 18-month lockdown when the takeover was agreed, meaning it cannot sell for another six months at least.