Altice UK snaps up 12% stake in BT

London Stock Exchange sign
Altice UK stated it “does not intend to make an offer for BT" despite the massive stock purchase.("London Stock Exchange" (CC BY 2.0) by jam_90s)

Altice UK bet big on fiber, making a surprise move to acquire a significant minority stake in operator BT by buying up 1.2 billion shares of its stock.

In a filing with the London Stock Exchange, Altice UK said it made the investment because it believes BT “has a compelling opportunity to deliver one of the U.K. Government's most important policies,” namely the expansion of fiber across the country. It stated the U.K. “provides a sound environment for substantial long-term investment,” adding the current regulatory framework offers BT the right incentives to make necessary investments in its network.

Financial Times reported the move means Altice UK is now BT’s largest investor. However, that seems to be as far as Altice UK plans to go, at least for now. The company stated in the filing it “does not intend to make an offer for BT.” Jeffries analyst Jerry Dellis told Financial Times any potential takeover bid would likely face an uphill political battle anyway.

In March, BT announced a $16.8 billion plan to expand fiber broadband to 20 million homes in the U.K. by 2026 following a favorable regulatory ruling on wholesale price regulation. Last month, BT upped its target to 25 million homes, after finding it was able to build faster and cheaper than previously expected. It also boosted its investment to a total of $21.2 billion. BT currently connects around 4.5 million homes with fiber.

RELATED: BT’s Openreach raises fiber goal to 25M premises by 2026

Altice UK, Altice USA, Altice France and Altice International are all owned by billionaire businessman Patrick Drahi through his company Next Alt. In a statement included in the aforementioned filing, Drahi said “BT has a significant opportunity to upgrade and extend its full-fiber broadband network to bring substantial benefits to millions of households across the U.K.” He expressed full support for BT management’s strategy to execute on its plan.

In a statement responding to the move, BT said it welcomes “all investors who recognize the long-term value of our business.”