Breakingviews - Billionaire Drahi plays the long game at BT
only increased the sense of expectation. Hence the disappointment at his incremental accumulation – BT shares fell 7%.
Drahi cannot now launch a bid for another six months. But short-term political considerations would complicate a quicker swoop anyway. Many of the Brexit-supporting voters who propelled Johnson to No. 10 would blanche at a foreigner controlling one of Britain’s most recognisable and important companies. A new investment law coming into effect in January gives such sentiments legal teeth.
In two years, things may look different. With another 8 million-odd homes hooked up, the current political sensitivity should have subsided. Furthermore, European take-private deals – including potentially Telecom Italia - may provide evidence that private equity is less destructive than its popular image.
For Drahi, the long-term goal would appear to be a carveout of Openreach, whose 3 billion pounds of annual EBITDA would probably attract a far higher valuation multiple on its own. Even if it doesn’t come to that, he has options. If KKR or others have a crack, Drahi is in the thick of it. If Openreach outperforms, he still enjoys the upside. In other words, he can afford to wait.- Franco-Israeli billionaire Patrick Drahi said on Dec.
- Drahi said he had “engaged constructively” with BT’s board and management in recent months and “remained fully supportive of their strategy”, especially in relation to the rollout of a nationwide fibre-optic broadband network.- The UK government said it was monitoring the situation closely and would “not hesitate to act if required to protect our critical national telecoms infrastructure”.Register now for FREE unlimited access to reuters.
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