Landmark decision: Allison Kirkby
BT has quietly hoisted a for sale sign over its international arm as plans to transform the group’s fortunes under chief executive Allison Kirkby gather steam.
The Global division sits within the BT Business unit and is run by Bas Burger, who was appointed in April last year.
Global services include selling internet and phone connectivity to more than 1,000 multinational corporate clients worldwide.
But the division has declined in profitability in recent years and earlier this year BT said it was looking at all options for the arm.
A source close to the company told The Mail on Sunday that Kirkby was determined to sell the business and would be willing to listen to offers.
The company is difficult to value, generating £2.4billion in revenue last year and £500million in earnings but no cash flow.
The source said Kirkby had privately made it clear that divesting non-UK assets was a priority. ‘Allison has a track record of making bold decisions and getting things done,’ the source added.
Potential buyers include private equity houses. Some have shown interest in the belief the business could be turned around over a five-year period. According to analysts, US rival Verizon has been mooted as a possible buyer, while tech giants such as Amazon and Microsoft may also be interested.
Selling the division piece by piece is also an option. Two weeks ago Macquarie-backed Viatel Technology was reported to be considering a move on BT Ireland. In September Telecom Italia expressed interest in acquiring the remnants of BT’s Italian business.
BT said: ‘It could be one transaction, whichever option maximises value.’ BT’s Business division, which includes the Global unit, accounts for 40 per cent of group turnover. It saw its revenue fall 2 per cent to £8.1 billion in the year to the end of March.
Its operating profit fell to £646 million, from £898 million in 2023. Global is understood to be a laggard within the Business division, frustrating Kirkby. Karen Egan at Enders Analysis said: ‘The problem is Global sells a lot of legacy services that simply are not that profitable.’
The move comes as BT prepares to reveal its half-year results this week. Under Kirkby, who took over in February, BT’s share price has climbed 32 per cent. Analysts are expecting updates on the performance of Openreach, which runs the UK’s broadband network.
They will also want to know what role artificial intelligence will play in the future of the group.
Kirkby is under pressure from three billionaire investors on BT’s share register. In August it was revealed that Indian telecoms tycoon Sunil Bharti Mittal would snap up the 25 per cent stake of billionaire Patrick Drahi’s struggling Altice. The move came just a month after one of the world’s richest men, Mexican Carlos Slim, took a 3 per cent stake in BT.
Neither Mittal nor Slim have made their intentions for BT public.
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