Telecoms tycoon Patrick Drahi raises stake in BT

BT’s largest shareholder has tightened its grip on the company, but has insisted a takeover bid is not on the agenda.

French-Israeli telecom billionaire Patrick Drahi increased his stake in the FTSE 100 firm to 24.5 percent from 18 percent earlier when his vehicle Altice bought another 650 million shares.

Drahi stunned the market in June 2021 when he revealed a 12 percent stake in the former state monopoly before raising it to 18 percent last December.

Despite the big increase in his stake in BT, which is now worth around £3.6bn, Drahi insisted he was not planning a move for the company.

Altice said it “has no intention of making a bid for BT”. According to the city’s rules, it is not allowed to bid for at least six months. BT shares rose 0.4 percent or 0.65 pence to 148.5 pence.

But the increase is likely to fuel speculation around Drahi’s plans for the company, as a shareholder is required to make a bid for a company if its stake exceeds 30 percent.

Russ Mould, director of investment at stockbroker AJ Bell, said: “Altice continues to deny any plans to make a bid for the company, but the move will raise eyebrows, especially given the national security sensitivities surrounding BT and its foreign-held assets. come property.’

The billionaire is believed to be working closely with BT CEO Philip Jansen to drive the company’s strategy by leveraging his hefty stake in the group.

Some believe this has informed BT’s plans for mass redundancies, with Jansen last week warning of up to 55,000 job losses.

Telecom analyst Paolo Pescatore said the tycoon’s long-term intentions were “unclear” but its commitment “could be seen as a strong endorsement of BT’s strategy” as it aggressively moves ahead with plans to roll out fiber internet in the UK.

Last year, a government review ruled that 59-year-old Moroccan-born Drahi could keep his stake in BT after it was found not to pose a threat to national security.

The tycoon, who also owns auction house Sotheby’s and a number of other companies, is worth around £4 billion.

Drahi’s move to BT follows last week’s announcement that the company planned to cut tens of thousands of jobs by 2030 in a bid to cut costs and boost profitability.

Jansen wants to reduce the workforce from 130,000 to between 75,000 and 90,000 by the end of the decade, which means that as many as 55,000 jobs could disappear.

It has been revealed that about 10,000 jobs will be replaced by artificial intelligence (AI) as rapidly advancing technologies impact the job market.

But Jansen’s plans could face hurdles after the plans sparked backlash from unions, raising the prospect of new strikes after strikes last year.

It also comes amid speculation that Jansen’s tenure could end after four years at the top of BT following revelations in The Mail on Sunday last month that succession planning was underway, although no formal search has been launched.

Victoria Scholar, head of investment at Interactive Investor, said Drahi’s investment provided “a vote of confidence in BT” but also raised questions as to whether it could pave the way for “more aggressive cost-cutting” at the telecom giant.

Known in business circles as the ‘King of Cost-Cutting’, Drahi earned a reputation for ruthlessness from French unions for downsizing the workforce and slashing salaries and expenses.