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Billionaire Patrick Drahi’s Altice UK has announced today that it will increase its stake in BT from 12.1% to 18%, renewing takeover fears
Back in June, Patrick Drahi, the billionaire owner of Altice Group, announced that he had formed Altice UK, with the new company taking a 12.1% stake in BT for £2 billion.
At the time, this move caused a wave of uncertainty for BT’s leadership, who feared that Drahi would launch a takeover bid for the company, something that Drahi himself denied interest in.
As per the law, Drahi would not be allowed to increase his stake in the company for the next six months, giving BT plenty of time to shore up its defences and the media time to speculate about Drahi’s true intentions. Drahi would be allowed to increase his stake from December 11th.
In October, BT hired advisory firm Robey Warshaw LLP to work alongside Goldman Sachs to help them prepare for any potential takeover bid.
By November, rumours were circulating that Drahi did, in fact, want a bigger part of BT, with sources suggesting that BT’s low share price could further entice him to make a play for the company.
Now, just three days after the December 11 deadline, it seems that Drahi will indeed increase his stake in BT, boosting it from 12.1% to 18%. Once again, Drahi has emphasised that he does not intend to launch a takeover, saying he was “fully supportive of their [BT’s management’s] strategy, principally to play the pivotal role in delivering the expansion of access to a full fibre broadband network”.
The UK government, meanwhile, says they are “monitoring the situation carefully”, with analysts suggesting that their support for Drahi and any increased stake in BT will likely rest on how the move will impact the rollout of full fibre across the country. Nonetheless, the government emphasised their willingness to intervene if any deal was viewed as detrimental to the national interest, saying it “will not hesitate to act if required to protect our critical national telecoms infrastructure”.
The investment comes at an interesting time for BT. While the company’s share price has been relatively stagnant for a number of years now, the company has typically failed to find potential suitors as a result of numerous factors, ranging from the impact of Brexit to BT’s complex relationship with Ofcom. More recently, however, some of these factors have begun to be resolved, most notably Ofcom granting Openreach additional certainty over their fibre investments, allowing the company to advance its £15 billion rollout plans. This may be a key factor in Drahi choosing to invest this year.
Whether this increased investment is Drahi slowly building up to a takeover bid is unclear, but analysts suggest that his next move could be to enage with major third party stakeholders, such as Deutsche Telekom.
“The move by Patrick Drahi will accelerate expectations that the French billionaire will eventually seek to take full control of BT. A logical next step could be to look to acquire Deutsche Telekom’s 12% stake in the operator and the German company has already indicated that it may be open to an offer,” explained Kester Mann, Director, Consumer and Connectivity at CCS Insight.
Last month, CEO of Deutsche Telekom, Tim Hoettges, indicated that "something is going to happen" with regards to the company’s 12% stake in BT, saying that the company was keeping "all options open".
What impact would a takeover of BT have on the UK government’s goals to create a gigabit Britain? Find out from the experts at next years live Connected Britain event
