{"id":33823,"date":"2023-02-28T10:19:59","date_gmt":"2023-02-28T10:19:59","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=33823"},"modified":"2023-02-28T10:24:26","modified_gmt":"2023-02-28T10:24:26","slug":"deutsche-telekom-ponders-future-of-its-12-5-percent-bt-stake","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2023\/02\/deutsche-telekom-ponders-future-of-its-12-5-percent-bt-stake.html","title":{"rendered":"Deutsche Telekom Ponders Future of its 12.5 Percent BT Stake"},"content":{"rendered":"

The boss of German telecoms giant Deutsche Telekom (DT), Tim H\u00f6ttges, has said that taking out a \u00a35.6bn stake in UK broadband and telecoms giant BT<\/a> Group in 2015 has turned out to be the “biggest mistake<\/em>” he ever made, after its value fell by almost \u00a34bn. But DT hasn’t given up on the possibility of doing a deal for BT<\/a>.<\/p>\n

In case anybody has forgotten, DT, which for as long as we can remember have been linked with speculation about a possible takeover of BT<\/a>, acquired their stake as part of the deal to merge mobile operator EE<\/a> – then owned by DT and France’s Orange – with BT. But while Orange mostly took the cash, DT opted for a 12.5% stake in BT.<\/p>\n

Since then, BT Group’s share value has plummeted due to a variety of issues, such as concern over pensions, huge debts, rising competition for full fibre broadband, regulatory pressures from Ofcom<\/a>, the impact of a huge investment in premium TV sport content and various other issues. During 2015 BT’s stock price hovered between 420 and 484, while today it’s worth just 140.<\/p>\n

In a new interview with the FT (paywall<\/a>), H\u00f6ttges admits that he “didn\u2019t understand all of the obstacles around BT<\/em>” and now wants “my money back<\/em>“. But getting out of the stock today would be the only sure way to lose, thus H\u00f6ttges is still looking at other options to “get that money back<\/em>“, such as increasing their stake in the hope that BT’s fortunes will improve or partnering to do a deal with another big shareholder like Altice UK.<\/p>\n

“I am not nervous, I will stay quiet, and do the portfolio transaction when I\u2019m ready to do so. There will be a time when we will do a deal<\/em>,” H\u00f6ttges said. But it should be noted that DT’s boss tends to say something like this almost every single year. Back in September 2021 H\u00f6ttges even said (here<\/a>) “in the next 12 months something [a deal] is going to happen there around [our 12% stake in BT]<\/em>“. But predictably, it didn’t.<\/p>\n

Despite all this, DT still sees BT as holding a strong position in the UK telecoms market, with potential for the share price to rise. So, might we see DT and Altice UK’s Patrick Drahi (French billionaire) making a play for the UK telecoms giant? According to H\u00f6ttges, Drahi is “sitting in front of the hole waiting for when the mouse is ready, to catch it<\/em>,” but to do that he’d need to satisfy the UK government first. Easier said than done.<\/p>\n

The UK government last year dropped their “full national security assessment<\/em>” of Altice UK’s move to increase its stake in BT from 12.1% to 18% (here<\/a> and here<\/a>). But an 18% stake was never going to be enough to raise any red flags, thus the government’s move was largely seen as a warning shot to those that might try to take foreign ownership of a “critical national telecoms infrastructure<\/em>” provider like BT.<\/p>\n

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BT.A Quotes<\/span><\/a> by TradingView<\/div>\n