French billionaire buys Patrick Drahi £2bn BT stake: Now ‘king of cost-cutting’ is the telecom giant’s biggest shareholder
Hammering down costs: Patrick Drahi (centre) celebrates his firm Altice’s New York flotation. He has now bought a 12.1 per cent stake in BT
The billionaire owner of the Sotheby’s auction house has bought a £2.2billion stake in BT, making him the telecoms giant’s biggest investor.
Shares soared after Patrick Drahi announced the 12.1 per cent stake and backed BT’s £15billion plan to roll out rapid fibre broadband in Britain.
But the investment, via his company Altice, raised fears the ‘King of cost-cutting’, may push BT’s top brass to slash costs.
Insiders said he was keen to work closely with BT’s management, including chief executive Philip Jansen to take the company forward – although he has told the Takeover Panel he does not intend to buy the company, a notification which remains in place for six months.
Drahi 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.’
Shares jumped 6.6 per cent, or 12p, to 195.15p on the news. BT said it welcomed ‘all investors who recognise the long-term value of our business’.
The former state monopoly was privatised in the 1980s, but in the last five years its share price has been in decline.
BT Sport has not performed as well as its rival Sky and the company is in talks to sell the arm.
It has also faced repeated criticism over its service for broadband and telephone customers.
But investors have spotted an opportunity in BT’s Openreach, which charges fees for companies including Sky, Shell and Talk Talk to piggyback on the network to provide consumer broadband.
BT shares hit an 11-year low last year, but have bounced back after regulator Ofcom unshackled it from price controls.