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Indian billionaire Sunil Bharti Mittal’s conglomerate has agreed to buy a 24.5 per cent stake in BT Group from Patrick Drahi’s Altice, saying the investment was a vote of confidence in the telecoms group and the UK.
Bharti Enterprises said on Monday its international investment arm would buy 10 per cent of BT’s shares from Altice immediately and purchase the remainder after it had secured the necessary regulatory approvals. It did not intend to make an offer for the whole of BT, Bharti added.
The investment raises the profile of the 66-year-old billionaire who amassed his fortune in India’s telecoms market. Bharti Airtel, the largest part of his empire, emerged as India’s second-largest operator following a brutal price war instigated by billionaire Mukesh Ambani in 2016 that felled several rivals.
“I’ve been watching BT for long, long years, it’s a company which has a glorious past, has national status, has this tremendous amount of physical infrastructure in the UK,” Mittal said on a call with reporters on Monday.
“So I hope that I can add some value to their thinking . . . we are long term, this is not a stock market operation and we are not in this for making a buck.”
Bharti said that it supported BT chief executive Allison Kirkby, who started in February and has presided over an almost 30 per cent gain in the group’s shares thanks to a combination of cost cuts, a higher dividend and improving cash flow. Altice’s entire stake in BT was worth about £3.2bn at Friday’s closing price.
Despite the recent rally in BT shares, including a 6 per cent jump on Monday, the investment in the former UK telecoms monopoly has proved lossmaking for Altice, according to a person familiar with the matter.
Altice first took a stake in BT in 2021, acquiring a 12 per cent holding that it later increased to 24.5 per cent. Altice borrowed heavily from banks to build its holding in BT, which has declined about £1bn in value since it was disclosed, according to FT calculations.
A portion of the stake was financed using derivatives that should have protected Drahi’s investment vehicle from some of these losses and Altice has also received dividends as a BT shareholder.
Altice declined to comment on the drop in the value of its BT stake.
Drahi faces pressure to sell assets to reduce a more than $60bn debt pile amassed during the era of cheap money.
In March, it sold a news channel and a radio station to shipping magnate Rodolphe Saadé. Last week, Drahi partnered with Abu Dhabi-based sovereign wealth fund ADQ to give a $1bn capital injection to auction house Sotheby’s.
Karen Egan, head of telecoms at Enders Analysis, described Mittal as a “completely different kettle of fish to Patrick Drahi”.
“[Mittal] is not short-term. He’ll be completely constructive and collaborative with BT, he really understands the holistic approach of telecoms,” she said.
The ties between Mittal and BT date back to the late 1990s, when the UK company owned a 21 per cent stake in Bharti Airtel and had two board seats.
Mittal is the second high-profile shareholder BT has gained this year, after it was disclosed in June that Mexican billionaire Carlos Slim had taken a 3 per cent stake.
Kirkby said on Monday: “We welcome investors who recognise the long-term value of our business, and this scale of investment from Bharti Global is a great vote of confidence in the future of BT Group and our strategy.”
Bharti Airtel’s Mumbai-listed shares fell 0.4 per cent on Monday but have advanced 43 per cent this year, beating the 10 per cent gain in India’s benchmark BSE Sensex index.
