Altice buys 12 percent stake in BT worth £2 billion

BT was informed of Altice’s stake in the company only on Wednesday.



Altice, the Luxembourg-based telecoms investor company, run by billionaire Patrick Drahi, has bought a 12.1 percent stake in British Telecom worth £2 billion. The investment in BT has been made through a new UK holding company separate from Altice’s main operations.

Altice has been buying BT shares in the open market through banks, including a £810 million trade. BT was informed of Altice’s stake in the company only on Wednesday.

British Telecom BT Altice Patrick Drahi

Altice said it did not intend to make a bid for the British Telecoms company, though the takeover code also does not allow it to make an unsolicited buyout offer for six months without the approval of BT’s management. Nor it will get a seat on the BT’s board.

Patrick Drahi becomes biggest BT investor  

Drahi is known to buy out underperforming telecoms by raising debt and stripping off costs and selling assets. Drahi’s endorsement of the BT management and the opportunity presented to the company for participating in the upgrading of UK’s broadband facility is a vote of confidence for BT.

Deutsche Telekom is a 12 percent shareholder in BT, which means two large entities in their field now have a stake in the British company.

Analysts believe Altice will also seek board representation.

“The stake buys us a seat at the table,” said a source close to Altice. “It starts the conversation over what we might do together.”

People in the know say a full takeover of BT was unlikely to succeed. “A full takeover (of BT or Openreach) would likely run into political opposition given the strategic importance of networks,” said Jerry Dellis, an analyst at Jefferies.

BT has recently seen a slight improvement in its fortunes, with its share price rising 90 percent since it hit 11-year lows last year. It gained 1 per cent to £1.87 after the Altice stake was revealed on Thursday.

British regulator Ofcom has offered to ease restrictions on companies investing in fibre upgrades and some tax breaks too for capital investments. BT has committed to invest £12 billion in getting full-fibre broadband connections to 20 million homes by 2026.

Drahi, who owns auction house Sotheby’s, believes that BT is well placed to take full advantage of UK’s move to transfer its internet network to full-fibre. He said this strength is not reflected in its share price.

“BT has a significant opportunity to upgrade and extend its full-fibre broadband network to bring substantial benefits to millions of households across the UK,” said Drahi. “We fully support the management’s strategy to deliver on this opportunity.”

BT chief executive Philip Jansen has maintained that the company needs investments to make the costly upgrade of over £15 billion. He has already held talks with wealth fund managers about possibilities.

Jansen said: “Investment on this scale from a respected industry leader is a big vote of confidence in BT’s bold plans to be the UK market leader in next-generation digital connectivity. I have already spoken with Patrick to welcome him and I look forward to ongoing engagement and discussion.”

Drahi delisted its shares in Amsterdam last year over undervaluation and turned the company private. Altice has offices spread all over the globe, including in France, Portugal, Israel, the US and the Dominican Republic. In recent years, it has been consolidating and has undertaken cost-cutting moves like retrenchment and disposal of assets.

It split its US business into a separate company. Last year Altice made a $7.8 billion offer to buy out Canadian cable company Cogeco, which was refused.

Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

Recent Posts

Inflation Brings More Worries for Investors in 2022

Inflation Brings More Worries for Investors in 2022

Inflation is chasing the investors and policy makers at a speedy rate. CPI increased by 7% in December, 2021, the highest since June, 1982.
10 mins ago
Amazon to Open First Algorithm-Based Fashion Store in LA

Amazon to Open First Algorithm-Based Fashion Store in LA

Enriching consumer experience in LA, Amazon’s Style store is transforming the ways of buying outfits through suggested algorithms.
4 hours ago
US Inflation Rate Reaches 7% Marking the Highest Since 1982

US Inflation Rate Reaches 7% Marking the Highest Since 1982

The annual inflation rate in the US hit 6.2%, recording a highest in decades. Due to an unstable inflation, consumer prices increased by 0.9 percent in October and June, 2021.
1 day ago
McDonald’s expands test with McPlant Burger to 600 New Locations

McDonald’s expands test with McPlant Burger to 600 New Locations

The McPlant Burger is coming to nearly 600 McDonald’s outlets in the Bay Area and Dallas-Forth Worth starting February 14.
2 days ago
Google’s Online Services Team Grapples with Mental Health Crisis

Google’s Online Services Team Grapples with Mental Health Crisis

In a 2019 internal document obtained by Recode, many employees attest to being demoted, ostracized, or assigned to less desirable projects for speaking out.
2 days ago
GM Offers Fans a Sneak-Peak of the New Cadillac Escalade V-Series SUV

GM Offers Fans a Sneak-Peak of the New Cadillac Escalade V-Series SUV

The running lights, too, have a classier, sporty design. Cadillac aptly captioned the video “Power has a sound – and it’s a roar.”
3 days ago