Latin America’s Richest Man Takes 3.2 Percent Stake in BT Group

The richest man in Latin America, Carlos Slim (worth around £72bn), has just become one of the largest shareholders in UK telecoms and broadband giant BT Group. The telecoms billionaire has taken out a 3.2% stake in the company, which is said to be worth around £400 million, but his intentions remain unclear.

At present BT’s biggest shareholder is still French billionaire Patrick Drahi via Altice UK, which holds a 24.5% stake in the business. After that it’s T-Mobile Holdings Ltd. (aka – Deutsche Telekom) on 12%, BNP Paribas (Suisse) SA on 10.8% and, until today, it then dropped all the way down to Schroder Investment Management Ltd. on just 2.12% and so forth.

Until now most of the speculation around a possible takeover of the business has tended to focus on Altice UK, but their stake currently sits just below the important 25% threshold for marking out a person with significant control (PSC) of a company.

German telecoms giant Deutsche Telekom (DT) is another company that has often – for as long as we can remember – been speculated to hold a wider interest BT (here), which may yet conceivably involve doing a deal with one of BT’s other shareholders. But so far nothing has ever come of that.

A spokesman for Mr Slim’s conglomerate, Grupo Carso, told the FT (paywall) that this move was merely a “financial investment, like many the group makes“. Meanwhile a spokesperson for the BT Group welcomed “any investor who recognises the long-term value of our business. We have frequent communication with all of our shareholders and meet with major investors on a regular basis. We look forward to engaging with Inbursa, just as we do with all investors.”

The move comes after BT’s new CEO, Allison Kirkby, updated the operator’s business strategy with plans to double cash flow over the next five years, slash around £3bn of costs and boost the dividend. The changes have helped to give BT Group’s share price a much-needed boost.

However, it remains unclear whether the Mexican billionaire’s move is part of a grander plan or merely a long-term strategy to pick up assets that may be viewed as undervalued today, but which could pay back much more in the future (this is currently the most likely scenario).

As for BT itself, they could be said to have overcome some of the obstacles and uncertainties that often-discouraged potential bidders in the past, although there are still plenty of hurdles for a suitor to consider (e.g. the increasingly competitive full fibre market, the high level of debt, political opposition and so forth). But to do anything serious here would require a green light from the UK Government, which has already shown investors like Altice UK that they can act if needed (here).