BT Group welcomes Bharti Global's purchase of Altice's stake in carrier

12th Aug 2024 07:15

(Sharecast News) - BT Group welcomed news that Bharti Global had acquired Altice UK's 24.5% stake in the telecoms carrier.

"We welcome investors who recognise the long-term value of our business, and this scale of investment from Bharti Global is a great vote of confidence in the future of BT Group and our strategy," BT boss, Alison Kirkby said.

"[...] They have a strong track record of success in the sector, and I look forward to ongoing and positive engagement with them in the months and years to come."

Nonetheless, Bharti issued a statement indicating that it had no intention of tabling an offer for BT.

Wholly owned Bharti Televentures UK would acquire a stake of approximately 9.99% "imminently", whilst the rest would be purchase once it had received the necessary 'green light' from regulators.

Bharti also said that it was voluntarily applying for UK National Security and Investment Act clearance.

The day before, citing an analysis from New Street Research, the Sunday Times had reported that media tycoon, Patrick Drahi's Altice had lowered its direct stake in BT to 10%.

Lenders were said to now hold the remaining roughly 14.5% stake, which was on loan to Drahi, allowing him to retain 24.5% of BT's voting rights.

Monday's transaction by Drahi came amid a recent spate of forced asset sales amid a volatility storm in global financial markets, as well as moves by some of the world's largest investors to manage risk in their portfolios through profit taking in some of their largest positions.

Also according to the Sunday Times, New Street Research had referenced talk in markets recently regarding the drag on BT's shares due to the overhang from Drahi's stake and the potential debt issues that he might have.

"However, we now believe that this is materially overstated," the analysts had reportedly concluded.

Commenting on Bharti's decision, Susanah Streeter at Hargreaves Lansdown said: "It clearly sees great potential in Openreach, which is responsible for maintaining and building out the new fibre networks. It hopes to reach 25mn premises by 2026 and looks well on track to do that.

"It's also likely to have been encouraged by indications that the cost of building 5G infrastructure may have peaked, and once new customers are moved over to the new networks, there is the potential for lower running costs."

As of 0824 BST, shares of BT Group were jumping 5.94% to reach 138.25p.

-- More to follow --