Drahi-for-Bharti swap gives BT partial relief
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Pierre Briancon
LONDON, Aug 12 (Reuters Breakingviews) -BT BT.L Chief Executive Allison Kirkby can breathe a sigh of relief. India’s Bharti on Monday announced it was buying French telco mogul Patrick Drahi’s near-25% stake in the $18 billion British telecom operator. The UK group’s boss can stop worrying about an over-indebted shareholder who might have been forced to sell his stake at bargain prices. But the switch still leaves her with a crowded shareholder base.
News of the Drahi-for-Bharti swap pushed up BT’s stock price by more than 6% on Monday morning. Investors had been worrying the French tycoon, who first started buying in May 2021, might be forced to unwind his purchase as he grapples with heavy debts in his Altice telecom empire.
Bharti will initially acquire a 10% stake in BT, corresponding roughly to the part Drahi owns outright. The rest of the portfolio, which the Indian group will acquire after receiving UK regulatory approvals, consists of derivatives contracts the French tycoon used to build his stake. Bharti wants to unwind that portfolio in an orderly fashion, with help from financial adviser Barclays, with the goal of owning the shares directly.
Drahi’s BT bet looks a costly mistake. Based on the prevailing BT share price when Drahi announced his investments, the stake cost about 4.5 billion pounds. Bharti said its purchase was based on the market price, which has recently ranged between 130 and 142 pence per share, implying an outlay of just 3.3 billion pounds at the mid-point. However, derivative contracts which limited Drahi’s downside may have transferred part of the hit to his banks.
Kirkby, whose efforts to turn around the British group have boosted the stock since she took charge in February, celebrated the arrival of a new shareholder “with a strong track record of success”. And the Indian group soothed potential fears that Britain’s new government might feel at the prospect of a large overseas group investing in a landmark company. Bharti will not ask for board representation – at least for now – and has volunteered to undergo the security checks the regulator may initiate.
Yet Bharti’s intentions are as unclear as those of the French tycoon it is replacing on BT’s shareholder register. The Indian group will sit alongside Deutsche Telekom DTEGn.DE, with a 12% stake, and Mexican billionaire Carlos Slim, with a 3% holding. These may be demanding shareholders, but at least they can all afford the patience Kirkby has asked for as she tries to turn around BT.
Follow @pierrebri on X
CONTEXT NEWS
India’s Bharti Enterprises said on Aug. 12 that it would acquire a 24.5% stake worth about 3.2 billion pounds ($4 billion) in British telecom operator BT from tycoon Patrick Drahi.
Bharti said in a statement on Monday that it had no intention of making an offer to acquire the whole of BT, the former state monopoly which is Britain’s biggest broadband and mobile company. The Indian company will buy an initial 9.99% stake before seeking to add the remaining 14.51% following UK regulatory approvals.
Asked how much Bharti had paid for the BT stake, Chairman Sunil Bharti Mittal noted that the shares had recently bounced between 130 pence and 142 pence, with a dividend paid out. He said the group had not asked for a board seat.
BT shares were up 6.6% at 139 pence by 0930 GMT on Aug. 12.
Graphic: BT has outperformed rivals since CEO Allison Kirkby took over https://reut.rs/3SJBB2Z
Editing by Peter Thal Larsen and Oliver Taslic
Gerelateerde activa
Laatste nieuws
Disclaimer: De entiteiten van de XM Group bieden diensten en toegang tot ons online handelsplatform op basis van uitsluitend-uitvoering, waardoor een persoon de beschikbare content op of via de website kan bekijken en/of gebruiken, zonder dat dit is bedoeld voor wijziging of uitbreiding. Dergelijk(e) toegang en gebruik vallen onder: (i) de algemene voorwaarden; (ii) risicowaarschuwingen; en de (iii) volledige disclaimer. Dergelijke content wordt daarom alleen aangeboden als algemene informatie. Wees u er daarnaast vooral van bewust dat de inhoud op ons online handelsplatform geen verzoek of aanbieding omvat om transacties op de financiële markten uit te voeren. Het beleggen op welke financiële markt dan ook vormt een aanzienlijk risico voor uw vermogen.
Alle materialen die op ons online handelsplatform worden gepubliceerd zijn bedoeld voor educatieve/informatieve doeleinden en omvatten geen – en moeten niet worden beschouwd als het bevatten van – financieel, vermogensbelastings- of handelsadvies en aanbevelingen, of een overzicht van onze handelsprijzen, of een aanbod of aanvraag van een transactie in financiële instrumenten of ongevraagde financiële promoties voor u.
Alle content van derden, alsmede content die is voorbereid door XM, zoals opinies, nieuws, onderzoeken, analyses, prijzen en andere informatie of koppelingen naar externe websites op deze website worden aangeboden op een 'zoals-ze-zijn'-basis, als algemene marktcommentaren, en vormen geen beleggingsadvies. Voor zover dat content wordt beschouwd als beleggingsonderzoek, moet u zich ervan bewust zijn en accepteren dat de content niet bedoeld was en niet is voorbereid in overeenstemming met de wettelijke vereisten die zijn opgesteld om de onafhankelijkheid van beleggingsonderzoek te bevorderen en als zodanig onder de geldende wetgeving en richtlijnen moet worden beschouwd als marketingcommunicatie. Zorg ervoor dat u onze Mededeling over niet-onafhankelijk beleggingsonderzoek en risicowaarschuwing in verband met de voorgaande informatie doorneemt en begrijpt; die kunt u hier lezen.
