PARIS French telecoms company Orange could get 900 million pounds ($1.15 billion) by reducing its stake in British rival BT Group from 4 percent to as little as 1.33 percent, it said on Monday.
Shares in BT, Britain's biggest telecoms operator, have underperformed those of its European peers of late, falling by about 21 percent since the start of the year after an accounting scandal in Italy forced the group to cut forecasts for the next two years.
Orange said in a statement late on Monday that it lowered its BT stake to 2.66 percent by selling about 133 million shares via a private placement, out of which 69 million were acquired by BT and its Employee Share Ownership Trust.
The proceedings for this sale amounted to 383 million pounds ($488 million), reflecting a price of 288 pence per share, or a discount of 0.59 percent on the closing price on Monday, Orange said.
In addition, Orange said it planned to launch an offering of four-year bonds exchangeable for BT shares on another third of its 4 percent stake in the British group for a total of 517 million pounds($658 million).
The bonds will be issued on June 27 at an initial exercise price of 389 pence, reflecting a premium of 35 percent on the price of the private placement.
If the bonds are fully exercised, Orange's stake in BT would then decrease to 1.33 percent.
BNP Paribas and JPMorgan acted as joint bookrunners on the transaction.
(Reporting by Mathieu Rosemain; Editing by David Goodman and James Dalgleish)