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.
BT has long traded on a low rating because the market has been concerned about the significant amount of money it has to spend on upgrading communications infrastructure, as well as competition in the broadband space and a large net debt position and a hefty pension deficit.
“Altice is an established name in the telecoms space and the purchase of a 12% holding in BT is a significant move, matching the stake already held by Deutsche Telekom,” said AJ Bell’s Russ Mould.
“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.
“Selling or finding a partner for the sports broadcasting arm is one option that’s already on that table, with a successful deal letting it focus on the core telephony business.
“BT’s Openreach division is also seen as a valuable part of the operation and that could be sold off.
“BT last year was rumoured to have attracted private equity interest with KKR touted as a potential bidder.”