Boost for BT as it confirms that it is in talks to buy Britain's biggest mobile operator EE as well as 02

• e-mail

Takeover talk: BT confirmed it is in talks with EE

BT shares have risen after confirming it is in talks to buy Britain’s biggest mobile phone company.

The former telecoms monopoly earlier this week said it was in talks with two mobile groups including former Cellnet group O2. 

But the identity of the second group was only yesterday confirmed after EE – the collaboration between Orange and T-Mobile – confirmed talks.

The company’s owners Deutsche Telekom and France Telecom said they 'are in highly preliminary exploratory discussions with British Telecom, led by chief executive Gavin Patterson (pictured), although it is too early to state whether any transaction may occur'.

They added: 'The joint shareholders of EE regularly analyse the development of the market in which EE operates, evaluating various strategic options which have the potential to create value and strengthen the market position.'

The pair had previously considered floating EE on the London Stock Exchange, but put the plans on ice more than a year ago. 

It is already the largest mobile group in the UK with 27 million customers, while BT is the biggest provider of landlines and home internet.

BT offloaded Cellnet more than a decade ago after finding itself facing a £30 billion debt mountain. But the company had planned to re-enter the market next year in order to be able to offer all four services – mobile, home internet, landline and TV – in a single package.

It had planned to sell new mobiles to existing customers, but has entered into takeover talks after both O2 and EE approached it last week. 

It could fork out around £11 billion for EE and £9 billion for O2, analysts reckon.

BT’s major shareholders have backed the plan, saying that the company had the financial firepower to pull off such a deal.

BT shares yesterday rose 2 per cent to close 8.6p higher at 404.4p.