23rd May 2023 11:22
(Alliance News) - Billionaire telecom tycoon Patrick Drahi's Altice UK Sarl on Tuesday said it has bought more shares in BT Group PLC, less than a week after the telecommunication company announced plans for major job cuts.
Altice said it has bought a further 650.0 million shares in the telecommunications provider, increasing its ownership to 2.44 billion shares. This represents about a 24.5% stake in BT.
Altice didn't say how much it paid for the shares. BT was flat at 147.90 pence early Tuesday in London. That makes 650.0 million shares worth GBP961.4 million and Altice's entire stake worth GBP3.61 billion.
BT on Thursday last week released its annual results, which sent its shares down 5.1% that day. Over the past 12 months, the stock is down 21%, but it had staged a recovery so far in 2023, rising 29%.
Victoria Scholar, head of Investment at interactive investor said: "Clearly Altice UK judged that now is an opportune moment to acquire further shares at an attractive price point with the stock down several percent since last week."
BT had said it will cut up to 55,000 jobs between by 2030, as it reported a decline in profit and revenue for its recent financial year. BT said it will reduce its number of workers to between 75,000 and 90,000 by financial years 2028 to 2030 from 130,000 currently. This is a reduction of between 31% and 42%.
In the financial year that ended March 31, revenue edged down 0.8% to GBP20.68 billion from GBP20.85 billion, but was 0.8% higher than the GBP20.51 billion estimated by Financial Times-cited market consensus. BT said annual pretax profit fell 12% to GBP1.73 billion from GBP1.96 billion.
BT maintained its total annual dividend at 7.7 pence, including an unchanged final dividend of 5.39p.
"Altice UK's stake building provides a vote of confidence in BT, but there are questions about what changes Drahi may want to implement to the business. Perhaps this could pave the way for more aggressive cost cuts at BT," Scholar added.
Altice reaffirmed on Tuesday that "it does not intend to make an offer for BT".
AJ Bell investment director Russ Mould said: "Altice is continuing to deny any plans to make an offer for the business but the move will raise eyebrows, particularly given the national security sensitivities around BT and its assets entering foreign ownership."
Over the past two years, Altice's relationship with BT has faced scrutiny.
Back in December 2021, Altice lifted its stake in BT to 18%. At the time, Altice confirmed it had no plans to mount a takeover offer and would be bound by that statement under UK takeover rules.
In May 2022, BT said it had received notification from the UK secretary of state for Business, Energy & Industrial Strategy saying that the government was exercising its power under the National Security & Investment Act 2021 to investigate the increase in the French company's stake.
The act was introduced in January last year, and it allows government ministers to more closely scrutinise approaches by overseas interests. It also means the UK government will be able to impose certain conditions on a takeover or block it.
BT, a former state-owned company, is particularly sensitive, as its Openreach arm maintains most of the UK's broadband network.
In August, the UK government said it would take "no further action" over the increase of Altice's shareholding in BT.
By Sophie Rose, Alliance News reporter
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