French telecoms giant takes 12% stake in BT

One of the biggest broadband companies in Europe today stunned the industry by splashing out £2 billion on a 12.1% stake in BT in what was seen as a huge vote of confidence in the company’s turnaround plans.

Altice UK, part of French billionaire Patrick Drahi’s telecoms giant Altice, built up its huge stake in the last two days.

Founder Patrick Drahi phoned BT’s chief executive and chairman last night to explain his plans.

He declared himself supportive of BT’s strategy to roll out superfast broadband to 25 million UK homes and had no intention of launching a takeover.

The pledge not to launch an offer now prevents it making a bid for a minimum of six months under UK takeover rules.

It came with a caveat, that it could bid for BT if it was agreed by the board or if another company made a takeover offer.

Analysts said Altice was likely to want a board seat to influence its future direction.

The share purchase makes it BT’s biggest shareholder, a shade ahead of Deutsche Telekom. DT has one board member.

In a statement, the French group said: “Altice UK has made this significant investment in BT as it believes that it has a compelling opportunity to deliver one of the UK government’s most important policies, namely the substantial expansion of access to a full fibre, gigabit-capable broadband network throughout the UK.”

BT has recently won a pricing framework from regulators that will enable it to roll out fibre to 25 million homes by the end of 2026.

Its shares have dramatically underperformed in recent years but Jansen’s turnaround plans, which include a sale of its sport broadcasting arm and massive investment in broadband, have recently started to reverse the slide.

Drahi has French, Israeli and Portuguese citizenship but lives in Switzerland.

He built up his empire over the last 20 years and has a reputation for driving extremely aggressive growth. He bought into, then took over France’s SFR telecoms group and has operations in the US, Portugal and Israel, with a combined 40 million customers.

Drahi said in a statement that he “holds the board and management team of BT in high regard and is supportive of their strategy.”