France-based Orange Group has announced plans to divest a portion of the shares it currently holds in BT Group. In a press release regarding the matter, Orange revealed that it is selling off a third of its current shareholding via a private placement of around 133 million BT shares – representing 1.33% of the share capital of the British company. BT itself will acquire up to GBP200 million (USD255 million) in this placement, part of which will reportedly be for the benefit of its Employee Share Ownership Trust. Simultaneously, Orange has launched an offering of bonds exchangeable into BT shares due 2021 for ‘a nominal amount of approximately GBP520 million’, with this figure representing a premium of between 35% and 40% above the share placement price carried out by way of a private placement.
The final terms of the placement and of the exchangeable bonds issue are expected to be announced today (20 June 2017), with settlement for the placement of the BT shares and the exchangeable bonds issue due to take place on 22 June 2017 and 27 June 2017, respectively.
Orange has noted that it will initially retain a 2.66% stake in BT Group following the private placement, down from the approximately 4% it currently holds, while if the bond issue is fully exercised it will be reduced further, to 1.33%. Meanwhile, the French company has confirmed it will agree to a 90-day lock up for its remaining shareholding in BT, subject to waiver from the joint bookrunners and certain exceptions, in particular the possibility to sell BT shares to a strategic investor on the proviso that this investor agrees to be bound by a similar lock up commitment. Proceeds from the stake sales will be used for the ‘general corporate purposes of Orange’.