By Samuel Indyk
Investing.com – Shares in BT Group PLC (LON:BT) were trading near the top of the FTSE 100 on Monday after being upgraded by Morgan Stanley (NYSE:MS) and amid news on a potential new Chairman.
Over the weekend, the Sunday Telegraph reported that Sir Ian Cheshire, the former boss of Barclays (LON:BARC) UK, was interested in taking over at BT after the resignation of Jan du Plessis earlier this month.
"It's not a state secret that I will put my hand up," Cheshire said in an interview with the paper. “If there’s an opportunity for me to do it, brilliant.”
Cheshire was appointed to the board of BT a year ago and is also the Chairman of Spire Healthcare.
Boardroom Row
Earlier this month it was reported that boardroom row between the CEO Philip Jansen and former Chair du Plessis was the reason for the latter’s unexpected resignation.
Jansen reportedly gave the board an ultimatum, hinting that he would leave, after becoming frustrated with the company’s speed at taking strategic decisions. Ultimately, du Plessis ended up losing out and said he would leave the company once a successor was found, having been in the role since November 2017.
The telecommunications company was forced to release a statement, saying that any suggestion du Plessis has impeded the transformation of BT is without foundation.
BT outlook
BT has had a very strong month with shares rising over 20% in March amid a number of supportive factors.
Ofcom, the UK communications regulator, has agreed to allow BT to charge more for its services to help fund the rollout of full fibre broadband across the country.
Secondly, the recent 5G spectrum auction was favourable for the telecoms companies, who paid far less that expected. EE, owned by BT, spent around £450mln of the £1.36bln total, which was far less than analysts had expected the companies to pay.
“Suddenly a lot of the headwinds that BT has had are getting resolved,” Cheshire said.
Upgrade
That goes some way to explaining why Morgan Stanley upgraded shares pre-market, taking them to ‘overweight’ from ‘equal-weight’. Morgan Stanley’s price target for the company was unchanged at 200p.
At 12:00GMT, shares were up 1.9% at 150.95p.