Carlos Slim makes £400 million bet on BT

Carlos Slim has built up a stake of just over 6% in BT at a cost of around £400 million, a move that serves as a vote of confidence in the UK telco.

Mary Lennighan

June 13, 2024

3 Min Read

BT disclosed the investment in a stock market filing this week. A trio of Carlos Slim-backed companies have picked up 3.16% of the UK incumbent's shares. The £408 million valuation is based on BT's closing price on Wednesday and comes courtesy of Reuters.

As tempting as it is to speculate that Slim, owner of Mexico's America Movil and longtime telecoms investor, is preparing a takeover bid for BT, that's a fairly unlikely outcome. Indeed, a spokesperson for the businessman's Grupo Carso operation told the Financial Times that the BT stake is a "financial investment, like many the group makes." And given that BT's share price has been depressed for some years, attracting other big name investors like France's Altice, that is highly likely to be the case.

But that in itself is positive news for BT. If an experienced telecoms entrepreneur like Slim views BT as a growth opportunity, that can only be a good thing for the operator, which, as of late, finds itself on something of an upward trajectory.

"The move reflects good recent momentum for BT under new CEO Alison Kirkby," said Kester Mann, Director, Consumer and Connectivity at CCS Insight, highlighting the chief executive's £3 billion cost-savings plan, the refocusing of BT Business on the UK market, and a decent set of full-year results that included increased cash flow guidance and dividend.

"Slim's investment is also an endorsement of Ms Kirkby's recent strategy update, which focuses on monetizing full fibre deployment and accelerating service simplification," Mann said.

He also floated the idea that Slim's initial investment could form a beachhead to building a stronger position in BT, having recently reduced his interest in Dutch incumbent KPN.

"Should that be the case, he may find a willing seller in Patrick Drahi," Mann suggested. "The French businessman owns 24.5% of BT's stock but his Altice telecoms group is saddled with huge debt."

Indeed, Altice is hampered by a debt pile of around US$60 billion. Drahi has been talking openly about his debt-reduction drive for the past year, having disclosed plans to raise around €3 billion through the sale of assets. It sold its media business for €1.55 billion earlier this year and offloaded a majority stake in its data centres business – valued at €764 million – to Morgan Stanley. It has also reportedly lined up suitors for its French fibre operations and its business in Portugal, but there has been no formal announcement of a sale of either yet. A share price increase at BT could convince the company to cash in.

BT's shares were up by almost 3% in London on Wednesday morning, at the time of writing. And the telco's stock has essentially held its value for the past month, since that results announcement triggered an uptick. It is still not back to where it was when Altice upped its stake to its current level just over a year ago, but clearly it's heading in the right direction.

About the Author(s)

Mary Lennighan

Mary has been following developments in the telecoms industry for more than 20 years. She is currently a freelance journalist, having stepped down as editor of Total Telecom in late 2017; her career history also includes three years at CIT Publications (now part of Telegeography) and a stint at Reuters. Mary's key area of focus is on the business of telecoms, looking at operator strategy and financial performance, as well as regulatory developments, spectrum allocation and the like. She holds a Bachelor's degree in modern languages and an MA in Italian language and literature.

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