Deutsche Telekom’s chief executive has called acquiring a stake in BT the “biggest mistake I ever made”: “I want my money back.”
Tim Hodges told the Financial Times he regretted a 2015 deal in which the German group took a £5.6bn stake in its British counterpart, which has since lost almost £4bn in value.
“It was too early and I didn’t understand all the constraints around BT,” he said.
Like many of its European peers, the former British monopoly has faced stagnant profits, intense competition and a falling share price as it invests billions of pounds to upgrade its broadband network to full fiber and roll out 5G technology. does.
Deutsche Telekom has managed to buck this broader trend in large part thanks to its lucrative bet on the US market through T-Mobile US; Its shares have gained more than 60 percent in the past five years.
The German operator acquired its stake in BT as part of a deal that saw it and France’s Orange sell BT to British mobile operator EE for £12.5bn.
Orange mostly settled for cash as part of the sale. But Hodges said he took the 12 per cent stake in BT because he was “terrified” about having exposure to a company that included both broadband and mobile operations.
Despite the billions lost, Hodges vowed that he would “get that money back”, adding that he had a “clear understanding” of the options, which included raising the stake in the hope that BT’s fortunes would improve or a collapse. Will partner with another large shareholder, without specifying whether they can take action.
“I am not nervous, I will keep quiet, and will do portfolio transactions when I am ready to do so. There will come a time when we will do a deal,” Hotges said, adding BT is the “cheapest telco” and increasing its value There are many possibilities to do.
Franco-Israeli tycoon Patrick Drahi has built up an 18 percent stake in BT, although his ability to further the holding has been limited by new UK powers to investigate and limit foreign ownership of assets deemed vital to national security. Challenged.
“Patrick Drahi is one of the smartest cats,” said Hotz, referring to stackbuilding in BT. “He is sitting in front of the hole and waiting when the mouse is ready to catch him.”
Over the past year, several telecoms tycoons and private equity groups have taken multi-billion pound stakes in what they see as undervalued British telecoms groups. French billionaire Xavier Neill and US conglomerate Liberty Global have joined UAE telecom operator E&N to acquire a stake in Vodafone, forming a 13 per cent stake.
However, Hodges was critical of this approach, saying it risked unnecessarily separating companies and bypassing investment needs, which “would be very bad for customers, very bad for Europe’s sovereignty”. ” [and] Too bad for the infrastructure”.