Investors stump up £1bn to fund BT's mobile bid

The big-spending telecoms giant BT raised £1bn from institutional investors yesterday to help fund its £12.5bn takeover of the mobile operator EE.

The company, which emerged as a winner in the latest Premier League rights auction on Monday, completed a placing of 222 million new shares through an “accelerated bookbuilding” process led by JP Morgan, Merrill Lynch and Goldman Sachs.

The shares were sold at 455p, a discount to yesterday’s opening price of 458.7p.

A BT takeover of EE would unite Britain’s biggest broadband and home phone company with the biggest mobile operator – although the deal is certain to face regulatory hurdles.

BT’s chief executive, Gavin Patterson, is betting that British consumers will want to buy the so-called “quad play” of services – mobile, home phone, broadband and TV – from a single provider, even though the indications that customers actually want it have been mixed.

Earlier this week, BT also agreed to pay £960m for two packages of 42 Premier League games over the next three seasons, including the Saturday night evening kick-off. Sky is paying £4.2bn for five of the seven packages, including a new Friday night slot. The deal makes the English Premier League the world’s second-most lucrative sports league, behind the NFL, which makes £4.5bn each season from American Football rights.

The figure does not include the international broadcast rights, which the Premier League will sell next year. These could generate a further £3bn or more. BT shares rose 3.5p to 463.4p yesterday, having hit a 14-year high yesterday as the City digested the latest live rights auction.