Drahi raises stake in BT to 24.5%, no takeover plans
LONDON (Reuters) – Billionaire Patrick Drahi has increased his stake in BT to 24.5%, but has reiterated that he does not plan a full takeover of Britain’s biggest telecoms group.
Since 2021, the Franco-Israeli entrepreneur has been adding to a position in Britain’s 175-year-old former monopoly BT, betting that its $20 billion investment in a new national fiber network will succeed in the long term.
The network that BT is building is viewed as a critical national infrastructure by the British government, which has, in the past, warned it would intervene to protect the rollout of that network by the telecoms group if needed.
On Tuesday, Drahi’s Altice UK unit lifted its stake to 24.5% from 18%, days after BT’s results showed the pressure its investment in the new fiber network was putting on its free cash flow. Shares in the group lost as much as 10% on Thursday, but they have since recovered.
At Monday’s closing price, Drahi’s purchase of BT shares would have cost £961 million.
Enders analyst James Barford said Drahi’s share purchase showed the telecoms investor’s confidence that BT would reap the benefits of the fiber buildup, which is expected to more than double future cash flow.
“That’s possibly the opportunity that he’s seen here... that they can deliver on that, and that it’s a strong path,” he said.
BT’s stock has struggled this decade and is way off highs of 500 pence in 2015.
Investors hope for an improvement as the completion of the new fiber network nears in 2030. Last week, BT
said it would cut up to 55,000 jobs in the future because it will not need all the contractors and engineers currently building the infrastructure.
Drahi’s statement said Altice did not intend to make an offer for BT, meaning it cannot do so for six months under UK takeover rules, unless circumstances change.
A change of circumstance includes the emergence of a counteroffer for BT or if BT’s board agrees to a deal.
Drahi’s Altice group controls SFR, France’s second-biggest telecoms company, and he also has assets in the US, Portugal and Israel.
Britain last year investigated Drahi’s investment in BT but found there was no national security risk.
Analysts have in the past speculated that Drahi could push BT, which has a market capitalization of about £15b. ($18.93b.), to separate its networks arm Openreach to achieve a higher valuation shorn of the risks related to BT’s enterprise and consumer units.
Deutsche Telekom is BT’s second-biggest shareholder, with a 12% stake, according to Refinitiv data.