Altice bets on UK fiber with £ 2bn BT stock

Altice, a telecommunications investor dominated by billionaire Patrick Drahi, has become the largest shareholder of a British company by buying a 12.1% stake in BT for £ 2 billion.

The acquisition marks a return to the contraction of Luxembourg-based companies over the past two years. Reduce that debtInvesting in BT through a new UK holding company separate from Altice’s core business represents Drahi’s most daring move since it acquired two U.S. cable companies five years ago. ..

Altice said it did not intend to bid on a British telecommunications company. This means that under the acquisition code, you will not be able to make a one-sided acquisition offer for six months without the approval of BT management, and you will not be offered a seat on the board of directors. ..

Building BT’s interests was a natural change for Drahi. His previous acquisition strategy was to manage undervalued telecommunications assets by increasing debt, eliminating costs and selling assets. His support and long-term view of the company’s role in fiber builds, where the UK lags behind other markets, is a new approach.

Deutsche Telekom continues to be a 12% stakeholder in BT. In short, UK companies count Europe’s largest incumbent telecommunications group and the sector’s most aggressive deal makers as their two largest shareholders.

Altice has bought shares in the open market through a bank containing £ 810m of trading, but only notified BT’s management on Wednesday that it has become the largest shareholder of the telecommunications company.

The move questioned Dry’s strategy of unleashing value in the long run, but those who knew the situation directly said the bid was unlikely to succeed. “A full acquisition (of BT or Openreach) is likely to run into political opposition given the strategic importance of the network,” said Jeffreys analyst Jerry Delice.

BT’s share price has risen 90% since hitting its 11-year low last summer, including a 5% rise last week. After the stock of Altice was revealed on Thursday, it rose 1% to £ 1.87.

The recent rise in stock prices has been driven by a series of positive events in BT, including a move by regulator Ofcom. Reduce the regulatory burden About companies investing in fiber upgrades and the government’s decision to introduce tax cuts on capital investments that are strengthening their hands.

Dry owning an auction house Sotheby’sBT said he believes it is best suited to take advantage of the huge investment in upgrading UK broadband networks to full fiber. This position was not reflected in the stock price.

“BT has an important opportunity to upgrade and expand full-fiber broadband networks to bring significant benefits to millions of households across the UK,” said Drahi. “We fully support management’s strategy to realize this opportunity.”

Philip Jansen, CEO of BT, argues that the company needs long-term investors to embark on costly network upgrades. Since joining Worldpay, a private-equity-backed payments business in 2019, Telecom has consulted and considered a £ 15bn network upgrade plan with infrastructure and sovereign wealth funds. Bring a funding partner Lay more fiber in rural areas.

Jansen said: “This scale of investment from a respected industry leader is a vote of great confidence in BT’s bold plan to become the UK market leader in next-generation digital connectivity. I have already spoken to welcome Patrick and him. And I look forward to continued involvement and discussion. “

Altice’s investment also occurs when BT is looking for a chair to replace Jan du Plessis. By step down In the summer following the conference room fracas.

Altice Delisting shares After claiming they were undervalued last year in Amsterdam. This was part of an effort to strengthen the vast empire covering France, Portugal, Israel, the United States and the Dominican Republic after a series of cost savings and asset disposals in recent years. We also split our US business into another company. BT continued to move $ 7.8 billion attempt failed Last year, we acquired Canadian cable company Cogeco.

Altice bets on UK fiber with £ 2bn BT stock

Source link Altice bets on UK fiber with £ 2bn BT stock

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