WEDNESDAY MARKET CLOSE: Telecoms sector buzzes on deal talks

The prospect of consolidation in the communications sector drove shares. Picture: TSPL
The prospect of consolidation in the communications sector drove shares. Picture: TSPL
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Telecom and broadcast firms were among the stock market risers as EE confirmed it was in the early stages of talks with BT over a deal that could see Orange and Deutsche Telekom offload their UK mobile phone business.

The prospect of consolidation in the communications sector drove shares in a number of major players, with BT up 8.6p to 404.4p, Vodafone 1.1p ahead at 225.6p and Sky 6p higher at 924p.

Analyst Andrew Hogley, at Espirito Santo, said: “Apart from EE’s interest, Telefónica also confirmed that is in preliminary talks with BT, which in our view leaves the latter in a very favourable position to eventually pick its partner for mobile operations, which also suggests that in terms of bargaining position BT has a clear edge vs its potential partners.”

The FTSE 100 Index was largely flat, closing just 1.97 points lower at 6,729.17.

In the FTSE 250, Thomas Cook investors headed for the departure lounge after chief executive Harriet Green announced her shock exit from the travel firm.

Shares slumped by 18 per cent, wiping more than £350 million off the group’s market value, after Green’s results day departure was accompanied by a warning that the company’s pace of recovery will moderate in the current year.

The double blow had a knock-on effect for other travel stocks. Thomas Cook slid 24.4p at 113.5p, while rival Tui Travel led the top-flight fallers’ board, off 9p at 417.5p. EasyJet dipped 15p to 1,545p.

Elsewhere, shares in fashion retailer French Connection surged almost 10 per cent or 5p to 56p after it said it continues to reduce its losses despite the recent impact of warm autumn weather on sales.