BT’s eleventh-hour acquisition of UK broadband provider Talk Talk out of administration may save 1.5mn broadband customers, but leaves creditors owed almost £1.5bn with little to no repayment. Two sources familiar with the matter said BT’s offer will leave most lenders with nothing, while US private equity firm Ares Management is set to receive over £100mn. Creditors lower in the capital stack are unlikely to recover, as BT’s deal fails to cover even the most secure of Talk Talk’s bonds.
The move grants BT control of the debt-free business and an additional 1.5mn UK broadband customers, though it anticipates a £400mn hit to its cash position this financial year. BT CEO Allison Kirkby met UK government officials last week to address competition concerns, prompting Culture Secretary Lisa Nandy to invoke a public interest intervention notice to assess impacts on public health, critical infrastructure, and vulnerable customers. Rival Virgin Media O2 criticised the deal as a “stitch-up masked as a rescue deal in the public interest.” The acquisition comes amid a broader M&A surge, with over $40bn in Q4 deals across industrials, trucking, and telecoms, led by Schneider Electric’s $23.7bn buy of PT C.
Source: Financial Times Companies · Summarized by HeadlinesBriefing