By Steve Goldstein
BT Group shares slumped as much as 8% on a report that Sky would invest in Virgin Media O2’s broadband plans.
BT Group /zigman2/quotes/209006687/delayed UK:BT.A +1.62% fell as th e Sunday Telegraph said Sky is closing on on a deal to back the fiber rollout, a threat to BT’s Openreach.
Virgin Media O2 is a venture between Liberty Global /zigman2/quotes/205000522/composite LBTYA +2.42% and Telefonica /zigman2/quotes/200416613/delayed ES:TEF -3.91% , and Sky is owned by Comcast /zigman2/quotes/209472081/composite CMCSA +4.93% . Analysts at UBS say a fiber JV/cable wholesale combined could add more than £300 million of EBITDA to VMO2 and was worth more than $3.5/Liberty Global share. The same analysis said BT could lose over £600 million of “very high margin” revenue or some 30 pence per BT share.
Sky currently spends some £760 million per year on broadband wholesale fees.
Broader European stock markets saw little movement in afternoon trade. The Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP -1.15% edged up 0.1% to 453.22.
U.K. supermarket chains including J Sainsbury /zigman2/quotes/206038250/delayed UK:SBRY -0.50% rose after the weekend auction for Wm. Morrison , which saw Clayton, Dubilier & Rice, submit the winning bid with a 287 pence per share, or £7.1 billion offer.