Through Altice UK, an investment vehicle set up specially for the task, Altice reportedly hoovered up a sizable bulk of BT shares earlier this week, via various banks, in a £2.2 billion (US$3.1 billion) spending spree.
It now holds a 12.1% stake in the UK incumbent, which slightly shades Deutsche Telekom's 12% shareholding.
According to the Financial Times, Altice UK only informed BT management yesterday it was behind various share trades, one of which was worth a hefty £810 million ($1.1 billion). The news was enough to send BT's shares to a 17-month high, at 190.65p. At the time of going to press, BT's share price was hovering around 188p.
Altice UK said it had no intention of mounting a takeover bid for BT. The upshot of that statement is that it can't make an unsolicited buyout offer for six months without approval from BT's management.
"Altice holds the board and management team of BT in high regard and is supportive of their strategy," said Altice UK in a statement reported by various media outlets.
Drahi, as quoted by the Financial Times, 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."
Drahi apparently believes BT's potential as the UK's main provider of full-fiber broadband services was not reflected in its share price. Skeptics might want to raise their hands here, however, mentioning perhaps the huge investment needed and that broadband competition in the UK is pretty fierce.
In a brief response to Altice's praise and approval, BT said it "welcome(s) all investors who recognize the long-term value of our business and the important role it plays in the UK." It added it was "making good progress in delivering our strategy and plan."
On presenting its latest of set of financial results, BT increased the target for its fiber-to-the-premises (FTTP) network from 20 million to 25 million premises by December 2026. It also opened the door to external investors for the first time by saying it will explore joint ventures to fund the additional 5 million premises.
"We're not excluding anybody, and we are very open minded," said BT CEO Philip Jansen.
In answer to a question during the analyst earnings call, he agreed that KPN's recent formation of a fiber infrastructure JV with Dutch pension fund APG represents a good example of how BT could proceed.
Vote of confidence
Analysts at Jefferies, as cited by Reuters, said the Altice investment was a "signal of confidence" in BT's strategy.
They also pointed out the "symmetry" in size of BT stakes held by Altice and Deutsche Telekom, which perhaps implied a connection of some sort going forward.
"A key issue now is how Altice intends to unlock value," continued analysts at Jefferies. One possibility they thought seemed most likely would be to encourage BT to spin off Openreach, its independently run infrastructure arm.
Jansen might not be too keen on that idea, however. On BT's latest earnings conference call, he seemed to categorically rule out any plan to sell a stake in Openreach.
Jansen on share-price roll
According to InvestingCube, BT's total share-price gains since November last year amount to more than 86%.
Jansen, personally, is doing well from the uptick. As recently as May 17, BT announced that its CEO had bought 1.25 million shares for 163p apiece.
He has shelled out more than £10 million ($14.1 million) on BT shares since taking the helm at the UK incumbent in 2019.
- Altice Europe set to delist next week
- Founder Drahi plans to take Altice Europe private
- Altice Europe steers steady course in Q3 2020
- Fiber push in UK might bode ill for BT
- BT flags cost of binge-watching to network and climate
— Ken Wieland, contributing editor, special to Light Reading