Yahoo Finance Meet Patrick Drahi, the billionaire who just backed BT
French-Israeli billionaire Patrick Drahi has bought a 12.1% stake in telecommunications company BT (BT-A.L), worth around £2.2bn ($3.1bn) as of Wednesday’s close.
His company, Altice Group, is now BT’s largest shareholder after the purchase of 1.2 billion shares through newly-formed Altice UK, which is wholly owned and controlled by the tycoon. The share purchases were handled by Morgan Stanley and BNP Paribas.
Altice UK, which is separate from other companies in the group, aims to capitalise on BT’s rollout of fibre broadband across Britain. Drahi, 57, said he will use Altice’s expertise in rolling out fibre networks to help BT expand across the UK.
It comes as Drahi, who has an estimated worth of $13.5bn (£9.6bn), also holds a similar-sized stake in Deutsche Telekom (DTE.DE). Analysts said Altice was likely to want a board seat to influence BT's future direction.
Born in Casablanca, Morocco, to two maths teachers, and currently residing in Switzerland, the businessman also has Israeli, French and Portuguese citizenships.
After moving to France as a teenager and completing an engineering degree in Paris, he went on to study optics and electronics before selling cable TV packages door-to-door.
The father-of-four then built up his empire over the last two decades, and is known for driving aggressive growth.
He founded Altice Group in 2001, which was taken private in January this year. It was set up as a holding company to invest in other cable ventures. Altice now serves more than 40 million customers and operates national fibre and mobile networks in a number of countries, including the US, France, Portugal and Israel.
In 2013, he founded international news channel i24 news, based in Israel, which broadcasts in French, Arabic and English, and purchased SFR, France’s second biggest mobile phone and internet provider, from Vivendi (VIV.PA).
He later purchased a 70% stake in Suddenlink Communications, the seventh-largest cable company in America, and Cablevision that same year, which was rebranded as Altice USA (ATUS).
In June 2019, Sotheby's announced it was being acquired by Drahi at a 61% market premium to take it private. He also owns Israeli cable television company HOT.
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However, according to data compiled by Bloomberg, Drahi has now racked up the equivalent of around €35bn (£30.2bn, $42.6bn) in debt from acquisitions.
On Thursday he said: “BT has a significant opportunity to upgrade and extend its full-fibre broadband network to bring substantial benefits to millions of households across the UK. We fully support the management’s strategy to deliver on this opportunity.
“We understand that the expansion of the broadband network is one of the UK government’s most important policy objectives and a core part of its levelling-up agenda.”
Altice confirmed that it does not intend to make a takeover offer for BT and will be bound by rule 2.8 of the takeover code, meaning that it cannot make a bid for six months under current circumstances.
BT said it welcomed "all investors who recognize 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," it added.
It comes after BT said last month that it was exploring potential joint ventures as it aims to bring full-fibre broadband to 25 million homes and businesses by December 2026.
BT is also considering selling a stake in its sports TV operation to help fund its network investments.
Read more: Free Premier League? ITV in running for BT's sports business
Shares in BT rose as much as 3% on the back of the news.
Russ Mould, investment director at AJ Bell, said: “It has been said for years that UK assets are cheap and 2021 is proving to be the year when investors finally put their money where their mouth is. Not only have we seen a spate of mergers and acquisitions, but investments of the strategic and activist kind are taking shape too.
"While Altice says there are no plans to make a bid at the moment, one must expect it to push for change within the business, given BT needs to find a solution to its very stretched balance sheet and how the market generally has a negative view of the company."
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