Altice – the French telecoms outfit that operates fibre and mobile networks serving more than 40 million punters in the US, France, Portugal and Israel – has bought a £2bn chunk of BT, it announced today.
Today's move means that Altice UK, a company set up for the acquisition, now holds 12.1 per cent of Britain's former state-owned monopoly.
Execs at Altice – itself owned by French telecoms billionaire Patrick Drahi – were quick to try to calm any jitters, insisting it has "informed the BT Board that it does not intend to make a takeover offer for BT".
Instead, Altice claimed it holds the board and management team at BT "in high regard and is supportive of their strategy." A sentiment perhaps not shared by everyone in BT's workforce.
Explaining the thinking that prompted the investment, it said:
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.
The UK government agreed recently – on behalf of British taxpayers – to allow BT to pay minimal tax for the next couple of years to help fund FTTP builds. BT had been paying £200-£300m a year.
With BT's share price down more than 58 per in the last five years, it seems like a good time for Altice to swoop in the hope that returns on its investment swell.
Industry watchers will, no doubt, already be sucking hard on the end of their pencils trying to figure out what this means and what might happen to BT over the fullness of time.
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"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," said BT today.
Earlier this month Virgin Media and O2 formally tied the knot in a 50:50 joint venture as part of plans to expand network reach and invest in next-generation gigabit broadband and 5G services. The new company – which received the regulatory green light in May – said it plans to invest at least £10bn over the next five years in the UK. ®