Patrick Drahi, the telecoms tycoon who owns almost 25% of BT, has said he does not plan to make a bid for Britain’s largest telecoms group.
Altice UK, a part of Drahi’s telecoms empire said that it had increased its shareholding in BT from 18 to 24.5% by purchasing a further 650,000,000 shares. Drahi made the move after shares in BT fell last week as it reported a lower than expected cashflow forecast for the year.
BT announced plans to reduce 40,000-55,00 jobs by the end the decade. Altice UK reiterated its position that it will not make an offer to BT’s board.
Drahi has now been bound by City takeover regulations, preventing Altice to make an offer for BT until six months unless the circumstances change. For example, if BT’s board approves a deal, or if another bidder makes an offer for BT.
Yesterday, shares in BT closed at 148 1/2p, up 3/4p or 0.4 percent. This valued the acquired stake at approximately PS962million.
Drahi is a Swiss businessman who has been a dealmaker for over 30 years. He has helped Altice become an international telecoms company through leveraged deals.
The government, exercising its national security powers, reviewed his stake increase from 12 to 18 percent two years earlier. In August, the business department said it would “take no further action”, however it has threatened to review any future stake-building in BT by Drahi.
A government spokesperson had stated that “under National Security and Investment Act acquisitions are assessed case-by-case, so any future transactions could be subjected to a different assessment under the act”.
Analysts at Deutsche Bank stated that “while UK government had previously approved the increase to 18%, we believe a complete offer for BT will be less likely as full control of telco assets has often been a political issue in the sector.”
A second analyst said, at the time the government took action: “It seems like it was a warning from the Government that he wouldn’t be allowed takeover BT.”
Prospect called BT, “one of the gems of UK R&D & tech innovation”, when it referred to Drahi.
Philip Jansen is the chief executive of the company. The company has invested PS15 billion to upgrade its broadband network from copper to full-fibre. This was a major part of the UK government’s agenda in modernising and levelling up the economy.
Drahi said he held BT’s management and board in “high regard”, and remained “fully supportive of their strategic direction”. He has refused to publicly discuss his intentions.