Patrick Drahi’s telecoms investment group has raised its stake in BT to nearly 25 percent, just days after the British group announced its most radical cost-cutting plan in decades.
Altice UK, the car controlled by French-Israeli billionaire Drahi, said on Tuesday it had raised its stake in the former UK monopoly to 24.5 percent from 18 percent.
In a short statement, Altice UK confirmed it had no plans to place an offer for BT, whose share price fell after a mixed set of results last week, but has remained up more than 30 per cent this year.
The investor remained reticent about building bets that began in 2021, when he disclosed a 12 percent holding that rose to 18 percent later that year. While BT shares have risen this year, they have fallen by about a quarter since Drahe began accumulating his stake.
The bet on Britain’s largest telecoms group was met with an investigation last year from the UK government, which “summoned” the investment to examine its security implications under new legislation. In August, the government decided that the stake did not require its intervention.
“Very few people expected Drahi to be a 10-year investor in BT,” said Georgios Irodiakounou, an analyst at Citigroup. “He is a strategic player but so far there is no evidence that he is trying to make any change in strategy. He only seems to believe in the value of the company.”
Before entering BT, Drahi was relatively unknown in the UK, but a prominent figure in the telecoms industry. He made his mark with a series of debt-fueled deals in the United States, France and Portugal.
His bet on BT has fueled speculation about whether he will push for a shake-up of the group, including a spin-off of its Openreach networking division.
Altice UK said Drahi was not seeking a seat on BT’s board, adding that it “continues to hold management in high regard and remains fully supportive of its strategy”.
In its statement, Altice UK said it would abandon its intention not to place a bid on BT if a third party announces an offer.
Under the National Security and Investment Act, the government will automatically review any stake in excess of 25 percent that a foreign entity holds in a company deemed to be of national security importance.
In its most drastic cost-cutting since the group’s privatization in the 1980s, BT has announced it will cut between 40,000 and 55,000 jobs over the next seven years as its labor-intensive build-out of full-fiber broadband across the UK slows and the progress of artificial intelligence increases. from the scope of automation.
In all of last year’s results, BT’s adjusted earnings were up, but free cash flow — a metric investors are watching closely — fell short of analysts’ expectations.
BT is not the only British telecoms group grappling with a major foreign investor. Nearly 15 percent stake in Vodafone has been built by Emirates Telecom Group E&E, which said earlier this month it would deepen relations with the shareholder.
French businessman Xavier Niel owns 2.5 percent, while the American communications group Liberty Global owns 5 percent.
Both Vodafone and BT benefited from the above-inflationary price increases they announced in April, despite calls for restraint from the government and regulator given the rising cost of living facing many.
The former monopoly also increased the prices set for wholesale customers by Openreach by 11 per cent.