Drahi’s Altice ups its stake in BT to 18%, but still has no plans for a takeover offer

• Patrick Drahi’s Altice UK has increased its stake in BT to 18%
• The move will have cost about £1 billion
• But the billionaire says he isn’t planning a full takeover 
• That clarification takes the heat of BT’s stock, which has dipped by more than 4% 

As expected, billionaire businessman Patrick Drahi has used his Altice UK vehicle to increase his company’s stake in BT from 12.1% to 18%, a move that will have cost about £1 billion (US$1.32 billion), but has made it clear that a move to take full control of BT is not on the cards. 

“Altice UK has restated its position to the Board of BT that it does not intend to make an Offer for BT,” it noted in a statement issued Tuesday morning. 

That clarification has dampened the excitement around BT’s stock, which had gained about 30% since late October in expectation that Drahi might make a more dramatic move: In early Tuesday morning trading it was down by 4.8% to 166.45 pence on the London Stock Exchange.

Altice, which Drahi once again fully controls following his move to buy out minority shareholders earlier this year, took the financial markets and BT by surprise in June by snapping up the 12.1% stake for about £2.2 billion (US$2.9 billion). (See Drahi’s Altice grabs 12.1% chunk of BT.)

Now he has increased his stake by about 50% to cement Altice’s position as BT’s largest single shareholder. Altice says it has acquired “a further 585,476,188 shares in BT, increasing its ownership to 1,785,476,188 shares, which represents 18.0% of BT's issued share capital.”

The move had been expected, though there was some expectation that Drahi might seek to acquire the 12.06% stake in BT currently owned by Deutsche Telekom, which is seeking to offload non-strategic assets. (See Deutsche Telekom CEO goes fishing (again) for towers deal.)

Reuters cited anonymous sources in November who said that Drahi was seeking to boost his stake so he could better influence the UK operator’s strategy.

In the Altice statement, Drahi noted: "We are pleased to take this opportunity to increase our shareholding in BT. Over recent months we have engaged constructively with the board and management of BT and look forward to continuing that dialogue. We continue to hold them in high regard and remain fully supportive of their strategy, principally to play the pivotal role in delivering the expansion of access to a full fibre broadband network; an investment program which is so important to both BT and to the UK." 

BT commented: “The Board of BT Group has been notified that Altice UK has increased its interest in BT Group’s voting share capital from 12.1% to 18.0%. The Board and management of BT Group will continue to operate the business in the interest of all shareholders and remains focussed on the successful execution of its strategy and building on recent performance momentum.” 

Altice has operations in France (SFR, the country’s second largest operator with about 23 million customers), Portugal, Israel and the Dominican Republic. 

- Ray Le Maistre, Editorial Director, TelecomTV