Bike-riding telecoms billionaire becomes BT’s biggest single shareholder
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.
BT made clear that Mr Drahi had already spoken with chief executive Philip Jansen Pic: BT
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.
BT shares climbed to their highest level since January last year
“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.
BT is increasing spending on its fibre roll-out Pic: BT
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.
Altice said it does not intend to make a takeover offer for BT
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.
Mr Drahi pounced in 2014 to buy SFR, France’s second-largest mobile operator
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”.
US cable magnate John Malone has described Mr Drahi 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.
A former top Post Office lawyer has been accused of telling the Horizon IT inquiry a “big fat lie” over his knowledge of a bug in the system that could have stopped wrongful prosecutions of sub-postmasters in their tracks.
Jarnail Singh was a senior in-house lawyer and subsequently head of criminal law at the Post Office from 2012.
The inquiry into the Horizon scandal heard he was copied into an email containing a report which identified the glitch in the accounting system but denied knowledge of it for years – despite saving the document and printing it out.
Mr Singh denied the claims by Jason Beer KC, counsel to the inquiry.
Mr Beer said the report was sent to Mr Singh just three days before sub-postmaster Seema Misra’s case began in October 2010.
Ms Misra was eight weeks pregnant when she was handed a 15-month prison sentence after being accused of stealing £74,000 from her branch in West Byfleet, Surrey.
Her conviction was later quashed by the Court of Appeal.
Please use Chrome browser for a more accessible video player
Sub-postmistress wrongly jailed while pregnant
Mr Singh said he “wasn’t made aware” of the report, written by Fujitsu engineer Gareth Jenkins.
Explanation of bug
Mr Beer said it described a bug “that will result in a receipts payment mismatch” and offered an explanation for apparent cases of theft among sub-postmasters.
He added that a file address on the bottom of the document, which included Mr Singh’s name, showed the lawyer had both saved the report to his drive and printed it out only nine minutes later.
Please use Chrome browser for a more accessible video player
Ex-Post Office exec accused of lying
He said this proved Mr Singh had lied years later when he denied having advance knowledge of the issues uncovered by a 2013 report carried out by forensic accounting firm Second Sight.
Mr Singh said he also did not know how to save or print documents during his employment at the organisation and had to ask others to do it for him.
Mr Beer accused Mr Singh of telling “a big fat lie” to the inquiry and of having failed to disclose important information to the defence or court ahead of Ms Misra’s prosecution, asking: “You’d known about the bug all along hadn’t you, Mr Singh?”
Please use Chrome browser for a more accessible video player
‘I have had breakdowns’
The lawyer responded: “No, that’s not true.”
Admission of mistakes
He also denied any suggestion of a cover up but admitted that “mistakes were made” in the prosecution of Ms Misra.
Mr Singh said: “I’m ever so sorry Ms Misra had suffered and I am ever so embarrassed to be here, that we made those mistakes and put somebody’s liberty at stake and the loss she suffered and the damage caused which was not what this was about.”
Read more:
More than £1m claimed as ‘profit’ may have come from victims
Post Office hero Bates had seemingly been preparing for this day
Following her case, hundreds of people were later wrongly convicted of stealing after bugs and errors in the accounting system, operated by Fujitsu, made it appear as though money was missing at their branches.
There were more than 700 convictions in total, dating back from 1995 to 2015.
Victims not only faced prison but financial ruin. Others were ostracised by their communities, while some took their own lives.
Fresh attention was brought to the scandal after ITV broadcast the drama Mr Bates Vs The Post Office, prompting government action that aims to speed up the clearing of names and payments of compensation.
Official figures have raised fears of a deepening public sector drag on the the UK’s economic recovery from recession.
Data from the Office for National Statistics (ONS) showed that productivity in the public sector, dominated by education and healthcare, deteriorated between the third and fourth quarters of 2023.
It measured a 1.0% decline over the period, leaving the figure 2.3% lower than a year ago and even further away from recovering pre-pandemic levels.
Money latest: The best breakfast to keep you full until lunch – without paying a fortune
The gap was put at 6.8%.
Public sector productivity measures the volume of services delivered against the volume of inputs – like salaries and government funding – that are needed to maintain those services.
While the sector has witnessed hits from the impacts of strikes since the end of the COVID crisis, the NHS has struggled to deal with a worsening backlog in many key waiting lists.
Rows over funding have been exacerbated by record levels of long-term sickness.
Please use Chrome browser for a more accessible video player
UK’s economy has ‘turned corner’
The official jobless rate stands at just over 4% – around 1.4 million people.
However, the numbers judged to be economically inactive due to poor health are nearing double that sum.
The Office for Budget Responsibility has estimated that the issue has added around £16bn to annual government borrowing bills.
Pressures have been reflected in ONS data, with output in both the health and education sectors falling during the fourth quarter of the year – contributing to the country’s recession.
That was despite rising inputs over the period.
Back in March, chancellor Jeremy Hunt used his budget to announce a Public Sector Productivity Plan – with an emphasis on improving technology in the National Health Service (NHS).
Figures next week are widely expected to confirm the end of the recession, with overall output returning to growth during the first quarter of the year.
Recent private sector surveys have painted a rosy picture for the dominant services sector, which accounts for almost 80% of overall output, despite continued pressure on budgets from the impact of higher inflation and interest rates to help cure the price problem.
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Environment12 months agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Sports3 years ago
Team Europe easily wins 4th straight Laver Cup
-
Sports6 months agoGame 1 of WS least-watched in recorded history
-
Environment1 year agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Sports4 weeks agoStory injured on diving stop, exits Red Sox game
-
Environment1 year agoTesla advances Powerwall pilot project with German electric company