The move follows the failure of billionaire Patrick Drahi’s attempt to sell Altice Portugal to pay off part of the group’s $60 billion debt.
Patrick Drahi’s struggling Altice Group will sell its stake in Britain’s BT Group to Indian conglomerate Bharti Enterprises, controlled by billionaire Sunil Bharti Mittal. The Altice Group, controlled by Drahi, is the largest shareholder in BT Group with a 24.5 percent stake.
Bharti immediately stressed in a statement to the London Stock Exchange today that the company has no intention of buying the entire BT Group.
The price for the share was not disclosed. A 9% stake was, according to the Daily Telegraph, citing New Street Research.
Drahi’s telecommunications empire, the Altice Group, was built largely on borrowed capital, but inflation and higher interest rates are making it more expensive to service the $60 billion in debt it has accumulated. The group is also under criminal investigation in Portugal and France for alleged corruption.
step by step
Altice Group acquired its initial 21.1% stake in BT in June 2021, increased it to 18% in December of the same year, and increased the stake to the current level in May 2023.
Bharti will also buy its stake gradually. The Indian conglomerate said it will buy the first part, equivalent to 9.99 percent of the British company, shortly. The remaining 14.51 percent will be bought once the company receives regulatory approval. The Guardian reports that BT previously owned a 21 percent stake in Bharti Airtel and held two seats on the company’s board between 1997 and 2001.
Bharti is voluntarily seeking approval under the UK’s National Security and Investment Act, which gives the government control over acquisitions involving critical infrastructure. The threshold for mandatory notification to the government is 25% stake.
Drahi had tried to sell Altice Portugal, the country’s renamed previous operator, but was unable to agree on a price with the potential buyers, which according to recent reports is Saudi Arabia’s STC.
Shows self-confidence
Mittal said in a statement: “This investment demonstrates the confidence we have in BT and in the UK. BT has a strong portfolio of market-leading brands, high-quality assets and an experienced management team with a compelling strategy mandated by the BT Board to create long-term value, which we fully support.
“BT plays a critical role in enabling millions of people across the UK to access fibre-optic broadband infrastructure. With its focus on strengthening its networks, driving consumer growth and optimising all aspects of its business, BT is well placed to consolidate its position as a leading global telecommunications company.”
Allison Kirkby, BT’s chief executive, said in a statement: “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 the BT Group and our strategy.”
“BT has a long-standing relationship with Bharti Enterprises and I am delighted that they share our ambitions and vision for the future of our business. They have an impressive track record in this sector and I look forward to a continued and positive working relationship with them in the months and years ahead.”
In June, Mexican billionaire Carlos Slim’s investment in a three percent stake in BT worth £400 million was seen as a sign of confidence in Kirkby’s leadership.
Bharti entered the telecommunications industry in 1995, although Mittal founded his business empire in 1976 as a bicycle component manufacturer. His interests now range from telecommunications and satellites to hotels and real estate. The Bharti group plays a dominant role in the Indian economy and Bharti Airtel is the world’s third-largest mobile operator by subscriber numbers.
