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BT is working with investment bankers on a possible sale of its Radianz unit as part of chief executive Allison Kirkby’s plan to simplify the UK telecoms group.
The FTSE 100 company is working with Citigroup to explore the disposal of Radianz, a service used by financial institutions to connect banks, brokers, exchanges and clearing houses to each other, according to three people familiar with the matter.
The possible sale comes as Kirkby attempts to overhaul the telecoms company by cutting costs and simplifying its products, platforms and processes. Outlining that strategy at its annual results in May, she said BT was “sharpening” its focus including by “exploring options to optimise our global business”, which would create a “simpler” group.
BT agreed to buy Radianz from Reuters for $175mn in 2005, along with a $3bn contract to supply the media and financial information group with all its network services. The unit generates earnings before interest, taxes, depreciation and amortisation of about £60mn to £70mn a year, according to two people familiar with the business.
It could be valued in the low hundreds of millions of pounds, according to one of the people and another person familiar with the matter.
BT and Citi declined to comment.
Radianz is part of BT’s business division, which was formed from a merger of BT’s enterprise and global units, announced in 2022. The division has declined in profitability in recent years, reporting a 5 per cent decrease in adjusted revenue to £1.9bn for the three months to the end of June, and a 2 per cent drop in adjusted earnings before interest, taxes, depreciation and amortisation year on year to £378mn.
The company said the business unit’s first-quarter performance had been affected by “legacy managed contract declines, reduced low-margin sales activity and contraction in the portfolio unit offset by cost transformation” over the period.
Kirkby, who took over the top job in February, having been on the board since 2019, said at the time that BT was continuing to modernise its portfolio and operations in the division.
That came after Bas Burger, chief executive of BT Business, acknowledged that previous promises of growth had “not all materialised” while setting out simplification and modernisation plans at a briefing last November.
Shares in BT rose more than 17 per cent at its full-year results in May after Kirkby announced an additional £3bn cost-savings programme, an increase to its dividend and new cash flow guidance. BT has also been exploring the sale of its Irish and Italian units, according to people familiar with the matter.
The group has since gained telecoms tycoons Carlos Slim and Sunil Bharti Mittal as shareholders. It is due to report its half-year results in November.
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