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BT Share Price Continues to Grind on 2021 M&A Chatter

BT share price is up for third straight day as investors price-in a potential take-over of the giant British telecommunications company. The shares are trading at 134p, which is slightly higher than this week’s low of 127p. The FTSE 100 in general is relatively unchanged on thin volume.

A few months ago, we wrote that some private equity companies were considering making an acquisition of BT Group. Such an acquisition makes sense to most investors because of the company’s market share in the UK and the fact that its share price seems undervalued. Also, analyst view its OpenReach program as being a key growth area.

Now, a recent survey by Bloomberg showed that most fund managers believe that BT is a potential takeover target. Other European telecommunication companies were also part of the list. 3 fund managers mentioned BT while 8 mentioned KPN, a Dutch firm.

A lot has happened this year. Just two weeks ago, the company agreed to sell parts of its Telecom Italia stake after years of struggle. It has been searching for a buyer after an accounting scandal came out a few years ago. The Italian business was the biggest BT’s business in terms of revenue but its profitability was never high. Also, the company restored its prized dividend after suspending it in May this year.

So, is BT share price too cheap to ignore?

The daily chart shows that BT share price formed a major bottom at around 100p a few weeks ago. It has also risen by more than 40% from its year-to-date low of 94.80p. Also, the shares have moved above the 25-day and 50-day exponential moving averages. Therefore, in the near term, we believe that BT shares will continue rising as bulls aim for the December high of 141p.

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