Patrick Drahi’s telecoms investment group has lifted its stake in BT to almost 25 per cent just days after the UK group announced its most radical cost-cutting drive in decades.
Altice UK, the vehicle controlled by Franco-Israeli billionaire Drahi, said on Tuesday that it had lifted its stake in the former UK monopoly to 24.5 per cent from 18 per cent.
In a short statement, Altice UK reiterated it had no plans to make an offer for BT, whose share price dipped following a mixed set of results last week but remains up more than 30 per cent this year.
The investor has remained tight-lipped over his stakebuilding that began in 2021, when he disclosed a 12 per cent holding that increased to 18 per cent later that year. While BT’s shares have climbed this year, they are down by almost a quarter since Drahi began amassing his stake.
The bet on Britain’s largest telecoms group drew scrutiny last year from the UK government, which “called in” the investment to examine its security implications under new legislation. In August, the government decided the stake did not require it to intervene.
“Very few people expected Drahi to be a 10-year investor in BT,” said Georgios Ierodiaconou, analyst at Citigroup. “He is a strategic player but so far there’s no evidence he’s trying to enact any change in strategy. It looks like he just believes in the value of the company.”
Before his foray into BT, Drahi was relatively unknown in the UK, but is a high-profile figure in the telecoms industry. He made his mark through a series of debt-fuelled deals in the US, France and Portugal.
His bet on BT has raised speculation on whether he would push for a shake-up of the group, including the spin-off of its networking division Openreach.
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 their strategy”.
In its statement, Altice UK said it would set aside its intention not to bid for BT if a third party announced an offer.
Under the National Security and Investment Act, the government will automatically review any stake of more than 25 per cent held by a foreign entity in a company deemed to be of significance for national security.
In its most radical cost-cutting since the group was privatised in the 1980s, BT announced it would cut between 40,000 and 55,000 jobs over the next seven years as its labour-intensive build out of full fibre broadband across the UK slows and the advance of AI increases the scope to automate.
In last week’s full-year results, BT’s adjusted earnings climbed but its free cash flow — a metric closely watched by investors — fell short of analysts’ forecasts.
BT is not the only UK telecoms group wrestling with a large foreign investor. United Arab Emirates telecoms group E& has built an almost 15 per cent stake in Vodafone, which earlier this month said it would deepen ties with the shareholder.
French tycoon Xavier Niel also has a 2.5 per cent stake and Liberty Global, a US telecoms group, has a 5 per cent holding.
Both Vodafone and BT have benefited from above-inflation price increases they announced in April, despite calls for restraint from the government and the regulator given the rising cost of living facing many.
The former monopoly also increased prices set for wholesale customers by Openreach by 11 per cent.
