O2 valuation set at £8bn

NEWS BT wireless, is set to be valued at only £8bn when it is demerged in November to become O2 - well short of earlier targets of £15bn. This assessment comes from analysts following a full day meeting yesterday with BT and the reason for the lower value is because of the global slump in the telecoms market. However, analysts reacted positively when Peter Erskine, BT's chief executive confirmed that the new mobile phone arm will only carry £500m of debt from its parent company. Following the debut of O2 on 19 November, shareholders will hold an equal number of shares in the newly formed company and the old BT. When the markets closed yesterday evening, BT's share price had fallen to its lowest point since 1998, down 23p to 395p.