Drahi says no takeover planned as his investment group raises stake from 18%
Not everyone was impressed by BT’s annual results last week and its CEO promising to slim the workforce by as many as 55,000 by 2030. They evidently were a hit with hit the Patrick Drahi, though.
The French-Israeli billionaire has control of the stake in BT via Altice UK, and upped its stake in BT from 18% to 24.5% while insisting there are no plans to mount a takeover.
BT’s share price is down by nearly a quarter since Drahi first started building a stake in BT in 2021, even though they’ve risen by nearly 30% this year.
Triggers
Last year the UK government scrutinised the holding under new legislation, the National Security and Investment Act, introduced to protect critical national assets, but did not intervene. Should Drahi’s companies acquire a stake larger than 25%, it will trigger a review automatically as stake held by a foreign investor in a British company deemed to be of national importance.
Last week’s annual results showed BT had missed it free cash flow target although its adjusted earnings rose 5%.
The promised job cuts didn’t cut much ice with the market as many of those that will go are not full-time BT staff, but contractors engaged in building out BT’s national fibre infrastructure which should be completed by then.
The operator also said it expects to be using AI more widely to automate many processes that are undertaken manually now which could reduce headcount by 10,000 in line with the rest of the industry.
Also, although BT signed up 400,000 new fibre customers and hiked prices by 11%, pushing up ARPU by 8%, but Group revenues only rose by 1%. It also has many competitors snapping at its fibre heels such as Liberty Global and CityFibre.
BT and its CEO Philip Jansen are living in interesting times. The share price initially dropped 8% after the announcements.