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The invasion of the UK by continental military forces has posed a small threat in the last thousand years. Patrick Drahi will not win if he plans, despite opposition, to take BT. The same can be said of trying to divorce.
Altice, French tycoon car, he has awakened earns a handful of slower UK telephony competition up to 18 percent. The government responded with a loud voice, saying it “did not hesitate” to protect BT under the new national security law.
Drahi appears to be making a crawling campaign, a trend popular with continental officials. Altice bought only 12% of BT in June, making it the largest shareholder in front of Deutsche Telekom.
Drahi knows BT’s biggest advantage lies in Openreach. BT owns a Broadband network business, but it is legally different from it. Using 8.5 times to calculate the price of ebitda, Bernstein estimates it costs more than £ 27bn, 70 percent more than BT and more than Altice.
But it would be difficult for Drahi to force a separation. This would not be in line with the government’s “promotion” policy. Openreach plans to connect with more than 25m families to become the fastest, which affects more than 4m families a year. Many are in remote, isolated areas.
In order to separate Openreach and BT, Drahi will also need to persuade BT pension trustees. This has a reduction of £ 8bn to make it possible.
BT should get a higher share price, or keep the contract in some other way at a discount. Broadband release was not over yet. Even an expert on the subject would agree that it should go further before it ends. Competition from two major players, Virgin Media and CityFibre, did not sound good.
Under the confiscation rules, Altice will not buy more BT shares for another six months. This, combined with the warning shot on Drahi’s bows, explains why BT shares fell 5 percent in morning sales.
Short-term gyrations like these have no effect on the expected game that Drahi is playing. But the methods that have made him a powerful businessman in France translates incorrectly into English. In the UK, top tycoons do not have the qualifications offered in clubbable France.
Lex’s team wants to hear more from readers. Please tell us what you think Drahi’s intentions are in the comments section below
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