Bike-riding telecoms billionaire becomes BT’s biggest single shareholder

Published

4 years ago

June 10, 2021

admin

Unveiling BT’s full year results, last month, the company’s chief executive, Philip Jansen, made clear he felt the shares were a long term investment.

For the second consecutive year, he announced an increase in spending in fibre rollout, disappointing some shareholders who would rather have seen BT focusing on returns in the shorter run rather than promising jam tomorrow.

Today, though, came proof that some investors in the broadband and telecoms stalwart are prepared to take a longer view.

Altice, the second-largest telecoms company in France after Orange (the renamed France Telecom), announced it had snapped up a 12.1% stake in BT worth roughly £2.2bn.

It means Altice – which is owned by France’s ninth-richest man, Patrick Drahi – becomes the biggest single shareholder in BT, overtaking Deutsche Telekom, which has a 12.06% stake as a result of BT’s 2014 acquisition of the mobile operator EE, which was previously part-owned by the German giant.

Shares of BT shot up by 3% at one point to take them to their highest level since January last year.

That was despite an unequivocal statement from Altice that it has no intention of bidding for BT.

It said: “Altice holds the board and management team of BT in high regard and is supportive of their strategy.

“Altice UK has informed the BT board that it does not intend to make a takeover offer for BT.

“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.

“Altice believes that the UK provides a sound environment for substantial long-term investment.

“This is supported by the current regulatory framework, which offers BT the appropriate incentives to make the necessary investments.”

In other words, then, the stake-building appears to be a strong endorsement of and vote of confidence in the long-term approach set out by Mr Jansen who, last month, said cash flow would “go through the roof” once the majority of full fibre rollout had been completed in 2026.

BT responded: “BT Group notes the announcement from Altice of their investment in BT and their statement of support for our management and strategy.

“We welcome all investors who recognise the long-term value of our business and the important role it plays in the UK.

“We are making good progress in delivering our strategy and plan.”

The emphasis from Altice that it is a long term shareholder, rather than seeking to make a takeover bid, also reflects a degree of pragmatism.

The UK government has recently bolstered its ability to intervene in takeovers of companies and particularly infrastructure that may be integral to national security.

As the owner of the UK’s largest fixed line and broadband network, Openreach, BT would appear to fall squarely into that category.

It makes it highly likely that the government would intervene were any bidder for BT to emerge.

That is not to say that Altice will not seek to influence what BT does.

Jerry Dellis, equity analyst at the investment bank Jefferies, told clients: “A key issue now is how Altice intends to unlock value.

“Encouraging an Openreach spin [off] seems most likely.

“A full takeover of BT or Openreach would be likely to run into political opposition given the strategic importance of networks.”

And Mr Drahi, the billionaire founder and owner of Altice, is used to getting his own way.

This was emphasised to the outside world when, in June 2019, he swooped to buy Sotheby’s, the world’s most famous auction house, which had looked poised to fall into the hands of the Chinese insurance billionaire Chen Dongsheng.

He has since announced plans to install his 26-year old son, Nathan, as head of Sotheby’s Asia at the end of the year.

Similarly, Mr Drahi pounced in 2014 to buy SFR, France’s second-largest mobile operator, from under the nose of the billionaire industrialist Martin Bouygues.

That business now forms the bulk of Altice Europe, which also owns Portugal Telecom, the country’s largest telecoms operator.

It also owns the second largest telecoms operators in Israel and the Dominican Republic.

Apart from SFR, its other assets in France include BFM TV, the country’s most-watched 24-hour rolling news channel and the radio broadcaster RMC.

Mr Drahi is also adept at pricing telecoms assets.

He bought out minority shareholders in Altice Europe in January this year, at a cost of €3.2bn (£2.7bn), after concluding it was undervalued by the market.

He also knows about demergers, having in 2018 spun off Altice’s majority shareholding in Altice USA, the cable and broadband operator, in response to concerns over the parent company’s debt.

What is quite striking about 57-year old Mr Drahi is that, unlike the heads of many of France’s richest business dynasties, he is an entirely self-made man.

Born in Casablanca, Morocco, his parents were maths teachers and he did not move to France until he was 15 years old.

Having studied at one of the country’s top engineering schools, Ecole Polytechnique, he joined the Dutch electronics giant Philips on graduation to work in fibre optics.

It was in this work that he first visited the United States and saw how the cable industry was growing.

On returning to France, he launched his first cable company, Sud Cable Services, using a student loan, the equivalent of the time of around £5,000, as seed capital.

He went on to sell the business to the US cable magnate John Malone four years later, becoming a multi-millionaire in the process, and going on to use the proceeds to set up Altice in 2002 with the intention of using it to consolidate cable and telecoms businesses across Europe.

Mr Malone, himself one of the industry’s most revered figures, has described him as a “genius”.

Mr Drahi has been rumoured to have had his eye on BT for some time now.

The Mail on Sunday reported in August last year that he was eyeing Openreach in particular and had “secured financial backing from heavyweight bankers at JP Morgan with a view to paying £20bn for the unit”.

He is likely to keep his motivation in buying the stake in BT, who made clear today that Mr Drahi had already spoken with Mr Jansen, to himself.

Mr Drahi, who with his wife, Lina, has four children, prefers to take a low-key approach.

With homes in Paris, Geneva, Tel Aviv and the US – he has French, Israeli and Portuguese citizenship – he gives few interviews and has been known in the past to turn up to meetings on foot or on a bicycle rather than, as most executives do, in a chauffeur-driven car.

One thing is clear, though.

Life at BT will be more interesting with him on the shareholder register.

Business

Plans to cut energy costs for thousands of businesses announced

Published

15 hours ago

June 23, 2025

admin

Plans to cut energy costs for thousands of businesses announced

Plans to cut energy costs for thousands of businesses have been announced as part of the government’s long-awaited industrial strategy.

The announcement confirms Sky News reporting that the plan proposes making energy prices more competitive.

Firms have said high prices have hindered growth and made them less competitive.

Commercial energy prices are the highest in the G7 group of industrialised nations.

Money blog: Freebies you can claim from companies on your birthday

Under the industrial strategy for 2025 to 2035, the government has said it plans to cut the bills of electricity-intensive manufacturers by up to £40 per megawatt hour – up to 25% – from 2027, which could benefit more than 7,000 businesses.

These savings will come by exempting them from certain levies on bills.

Roughly 500 of the most energy-intensive companies, such as the steel industry, chemicals and glassmaking industries, will also see their network charges cut.

The current 60% discount they get, via the British Industry Supercharger scheme, will increase to 90% from next year.

The government also said the energy measures would be funded through reforms to the energy system, without raising household bills or taxes.

The scope and eligibility for the scheme will be finalised after a consultation.

The policy is the first industrial strategy of its kind in eight years and comes as part of the government’s key priority of growing the economy.

Pressure was on to develop such a policy after the US’s Inflation Reduction Act boosted investment in renewable energy, and the European Union’s Net-Zero Industry Act was designed to boost domestic production.

A “bespoke” 10-year plan has been created for eight sectors where the UK is said to be strong already and there is potential for growth.

The sectors named by the government are advanced manufacturing, clean energy, creative industries, defence, digital and technologies, life sciences, professional and business services, and financial services.

The state-owned British Business Bank will expand to spur investment into smaller companies, and provide an extra £1.2bn a year by 2028-29.

The government also repeated its ambition to cut regulatory burdens, spend more on research and development and speed up the planning process.

Business

Former Centrica chief Laidlaw in frame to chair embattled BP

Published

3 days ago

June 21, 2025

admin

Former Centrica chief Laidlaw in frame to chair embattled BP

Sam Laidlaw, the former boss of Centrica, is among the candidates being considered as the next chairman of BP, Britain’s besieged oil and gas exploration giant.

Sky News has learnt that Mr Laidlaw is being considered by BP board members as a potential successor to Helge Lund, who announced in April that he would step down.

BP’s chair search comes with the £62bn oil major in a state of crisis, as industry predators circle and the pace of its strategic transformation being interrogated by shareholders.

Elliott Management, the activist investor, snapped up a multibillion pound stake in BP earlier this year and is pushing its chief executive, Murray Auchincloss, to accelerate spending cuts and ditch a string of renewable energy commitments.

Mr Lund’s departure will come after nearly a quarter of BP’s shareholders opposed his re-election at its annual meeting in April – an unusually large protest given that his intention to step down had already been announced.

BP’s senior independent director – the Aviva chief executive Amanda Blanc – is said to be moving “at pace” to complete the recruitment process.

A number of prominent candidates are understood to be in discussions with headhunters advising BP on the search.

Mr Laidlaw would be a logical choice to take the role, having transformed Centrica, the owner of British Gas, during his tenure, which ended in 2014.

Since then, he has had a long stint – which recently concluded – on the board of miner Rio Tinto, which has been fending off activist calls to abandon its London listing.

He also established, and then sold, Neptune Energy, an oil company which was acquired by Italy’s Eni for nearly £4bn in 2023.

Last December, Mr Laidlaw was appointed chairman of AWE, the government-owned body which oversees Britain’s nuclear weapons capability.

He also has strong family connections to BP, with his father, Christopher Laidlaw, having served as its deputy chairman during a long business career.

One person close to BP said the younger Mr Laidlaw had been approached about chairing the company during its previous recruitment process but had ruled himself out because of his Neptune Energy role.

The status of his engagement with BP’s search was unclear on Saturday.

Another person said to have been approached is Ken MacKenzie, who recently retired as chairman of the mining giant BHP.

Mr MacKenzie headed BHP during a period when Elliott held a stake in the company, and is said to have a good working relationship with the investor.

Shares in BP have continued their downward trajectory over the last year, having fallen by nearly a fifth during that period.

The company’s valuation slump is reported to have drawn renewed interest in a possible takeover bid, with rivals Shell and ExxonMobil among those said to have “run the numbers” in recent months.

Reports of such interest have not elicited any formal response, suggesting that any deal is conceptual at this stage.

BP is racing to sell assets including Castrol, its lubricants division, which could command a price of about $8bn.

This weekend, BP declined to comment, while Mr Laidlaw could not be reached for comment.

Business

Hundreds of jobs at risk as River Island takes axe to store base

Published

4 days ago

June 20, 2025

admin

Hundreds of jobs at risk as River Island takes axe to store base

Hundreds more high street jobs are being put at risk as part of a sweeping overhaul of the family-owned fashion retailer River Island.

Sky News has learnt that the clothing chain, which trades from about 230 stores, is proposing to close 33 shops in a restructuring plan which will be put to creditors in August.

The fate of a further 70 stores is dependent upon agreements being reached with landlords to slash rent payments.

Money latest: Why Aldi ‘could be forced to rethink’ business model

Confirmation of the plans comes less than a month after Sky News revealed that the company, which was founded in 1948 by Bernard Lewis, was working with PricewaterhouseCoopers (PwC) on a restructuring plan.

In a statement issued on Friday, Ben Lewis, River Island’s chief executive, said: “River Island is a much-loved retailer, with a decades-long history on the British high street.

“However, the well-documented migration of shoppers from the high street to online has left the business with a large portfolio of stores that is no longer aligned to our customers’ needs.

“The sharp rise in the cost of doing business over the last few years has only added to the financial burden.

“We have a clear strategy to transform the business to ensure its long-term viability.

“Recent improvements in our fashion offer and in-store shopping experience are already showing very positive results, but it is only with a restructuring plan that we will be able to see this strategy through and secure River Island’s future as a profitable retail business.

“We regret any job losses as a result of store closures, and we will try to keep these to a minimum.”

The company declined to comment on how many jobs would be put at risk by the initial 33 shop closures, or on the scale of the rent cuts being sought during talks with landlords.

In total, it is understood to employ about 5,500 people.

Sources said that new funding will be injected into River Island if the restructuring plan is approved in August.

Previously named Lewis and Chelsea Girl, the business, it adopting its current brand during the 1980s.

Accounts for River Island Clothing Co for the 52 weeks ended 30 December 2023 show the company made a £33.2m pre-tax loss.

Turnover during the year fell by more than 19% to £578.1m.

A restructuring plan is a court-supervised process which enables companies facing financial difficulties to compromise creditors such as landlords in order to avoid insolvency proceedings.

An identical process is being used to close scores of Poundland shops and slash rents at hundreds more.

In its latest accounts at Companies House, River Island Holdings Limited warned of a multitude of financial and operational risks to its business.

“The market for retailing of fashion clothing is fast changing with customer preferences for more diverse, convenient and speedier shopping journeys and with increasing competition especially in the digital space,” it said.

“The key business risks for the group are the pressures of a highly competitive and changing retail environment combined with increased economic uncertainty.

“A number of geopolitical events have resulted in continuing supply chain disruption as well as energy, labour and food price increases, driving inflation and interest rates higher and resulting in weaker disposable income and lower consumer confidence.”

Retailers have complained bitterly about the impact of tax changes announced by Rachel Reeves, the chancellor, in last autumn’s Budget.

Since then, a cluster of well-known chains, including Lakeland and The Original Factory Shop, have been forced to seek new owners.