UK - Is BT a £20bn private equity target?

The telecoms group is attractive to venture capitalists because its stable cashflows could be used to pay off the more than £10 billion of debt that would be needed to fund the leveraged buyout. Potential private equity bidders could also sell other BT assets, such as its network, to help to fund the deal.

The group’s pension deficit, which totalled £3.8bn under FRS17 accounting standards at the end of last March could also be a consideration.

Based on Thursday's closing price, BT had a market cap of £17.4bn. At the end of 2005 the group had sales of £18.6bn, assets of £27bn and liabilities of £23bn. EBITDA was £6.2bn.

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