Altice – the French telecommunications company that operates fiber and mobile phone networks serving more than 40 million punters in the United States, France, Portugal and Israel – has bought a £ 2 billion stake in BT , she announced today.
Today’s decision means Altice UK, a company formed for the acquisition, now owns 12.1% of the former UK state monopoly.
Executives at Altice – itself owned by French telecommunications billionaire Patrick Drahi – were quick to try to calm any nervousness, insisting that he “informed BT’s board that he did not intend to make a takeover offer for BT ”.
Instead, Altice said it holds BT’s board and management team “in high regard and supports their strategy.” A sentiment perhaps not shared by everyone in the BT workforce.
Explaining the thought behind the investment, he said:
The UK government recently agreed – on behalf of UK taxpayers – to allow BT to pay minimum tax over the next two years to help finance FTTP builds. BT paid between £ 200m and £ 300m a year.
With BT’s stock price down more than 58 percent over the past five years, it seems like now is the right time for Altice to melt in the hope that returns on investment will increase.
Industry watchers will, no doubt, already be out of breath trying to figure out what this means and what could happen to BT over time.
“BT Group takes note of Altice’s announcement of its investment in BT and of its statement of support for our management and strategy. We welcome all investors who recognize the long term value of our business and the important role it plays in the UK. We are making good progress in implementing our strategy and plan, ”BT said today.
Earlier this month, Virgin Media and O2 officially tied the knot in a 50/50 joint venture as part of plans to expand the network’s reach and invest in next-gen gigabit and 5G broadband services. The new company – which received the regulatory green light in May – has said it plans to invest at least £ 10 billion over the next five years in the UK. ®