Member Info for DONVANVLIET1

Fleccy - "But he is delivering; The FTTP/5G rollout is accelerating, they're ahead of schedule on the cost savings, and the strategy is heading in the right direction, also ahead of schedule. BT sport has gone, it's spun off into a different company, and Warner will eventually buy out BT completely.
Jansen has to balance OFCOM, competition, litigation, strategy, etc. It's accepted that BT CEO is amongst the hardest CEO positions in the UK, personally I think he's doing a really good job."

Fleccy - I fully concur. Running BT is without doubt one of the most onerous tasks in the FTSE 100. Having to navigate a minefield of regulations and governmental pressures with both hands often tied behind their backs makes a mockery of running a private company. It is without doubt one of the toughest gigs in the UK and anyone who says that the company can run itself (as has been cited recently) clearly lives in la la land and has little or no grasp of reality.

BT has returned to revenue growth for the first time in five years, helped by consumer price rises, but shares in Britain’s biggest telecoms group fell heavily amid a weak performance from its enterprise business.

Group adjusted profit rose 2 per cent to £1.9 billion in the three months to the end of June, BT’s first quarter, on revenues up 1 per cent to £5.1 billion.

Mobile service and fixed revenues in BT’s consumer business, which includes its EE mobile network, improved as they returned close to levels before the start of the pandemic.

The growth was helped by BT’s annual contractual price rise in April — 5.4 per cent inflation plus 3.9 per cent — and strong revenues at BT Sport, its broadcast division, including the WBC title fight between Tyson Fury and Dillian Whyte at Wembley in April.

Philip Jansen, BT’s chief executive, said the price rises supported investment in BT’s network and offset cost inflation, and it planned price increases again next year. “We’re in a very, very challenging environment economically . . . It’s really, really important that BT continues to be able to invest in the future,” he said.

Jansen, 58, added: “You’ve got to look at the metrics in the round. If you look at it in total, high satisfaction, high net promoter scores, very low churn and absolute value-for-money scores are in great shape, because we’re providing a key service at around £1 a day.”

BT is investing £15 billion in Openreach, its infrastructure division, which is taking full-fibre broadband to 25 million premises by 2026, which will improve internet speeds and reliability. Jansen said BT’s network was the “only real game in town for speed, quality and service”. Openreach’s full-fibre network reaches more than 8 million UK homes and businesses. BT anticipates increasing its annual build from 2.6 million premises last year to about 3.5 million this year. Meanwhile, EE’s 5G network covers more than 55 per cent of the population.

Jansen said that “notwithstanding the current economic uncertainty”, BT was confident of hitting its full-year forecasts of revenue growth and at least £7.9 billion of adjusted earnings.

On a statutory basis, reported profit before tax fell 10 per cent to £482 million due to “increased depreciation”.

The 20 per cent growth in profits at BT’s consumer business was offset by a 27 per cent drop in its enterprise division, serving corporate customers. Jansen said enterprise sales were weakened by the loss of a Virgin Mobile wholesale contract.

Despite the return to growth and reiterating its outlook, shares in BT fell by 14¼p, or 8.1 per cent, to 161¾p.

Jerry Dellis, an analyst at Jefferies, said “the promise of a second-half enterprise recovery without greater clarity on the plan and management’s ability to deliver this against the weak economic backdrop leaves investors lacking adequate visibility at this stage”.

The challenging trading conditions come as BT faces its first national industrial

The competition regulator has cleared BT’s deal with Warner Bros Discovery to set up a televised sports joint venture that will combine BT Sport and Eurosport UK.

The Competition and Markets Authority launched an initial merger inquiry at the end of May after the deal was struck that month. Officials reviewed whether the tie-up would result in a “substantial lessening” of competition in the UK and had given the industry until last Sunday to raise issues.

The CMA said yesterday that it did not plan to launch an in-depth phase two inquiry.

The green light for the deal left shares in BT down 3¾p, or 2 per cent, at 177¼p, suggesting the City had not been expecting competition issues to jeopardise the joint venture.

The 50-50 partnership will bring together sports rights including the Uefa Champions League and Premier League football, Premiership rugby, the Olympic Games, tennis Grand Slams and the Tour de France. BT customers will also have access to the Discovery+ entertainment service.

BT said yesterday that the CMA’s decision would allow the creation of the joint venture in the “coming weeks”, although “both BT Sport and Eurosport UK will initially retain their separate brands”.

The venture provides BT with a potential full exit in the future. It has spent billions buying rights since BT Sport was launched in 2013 as a free service to retain broadband customers.

Gavin Patterson, the former chief executive, had wanted to stem customer losses to Sky, which had dominated the pay-TV sports market for two decades.

Philip Jansen, BT’s chief executive since 2019, has prioritised investment in upgrading the Openreach broadband network.

Patrick Drahi could raise $20bn from his US cable business

The telecoms tycoon building a stake in BT is pursuing a potential sale of part of his heavily indebted US business, a deal that could have ramifications for Britain’s largest telecoms group.

Altice USA, whose chairman is Patrick Drahi, is exploring the sale of Suddenlink, which provides cable and internet services in the south-central part of the US, for up to $20 billion and is working with investment bankers at Goldman Sachs, Bloomberg reported.

A possible sale triggered a rebound in shares of Altice USA in New York, which this year had fallen to their lowest since Drahi, 58, spun off the US business from his other international telecoms assets in 2017.

The stock rallied by more than a fifth on Thursday but remains about two thirds down on its $30 issue price, and closed yesterday at $11, 3 per cent up.

Suddenlink is a brand of Altice USA, one of the largest broadband and video services providers in the country with more than five million residential and business customers across 21 states.

Drahi emerged as BT’s largest shareholder in June last year, via Altice UK, a Luxembourg-based vehicle, but the fortunes of parts of his empire have since deteriorated.

Kwasi Kwarteng, the business secretary, in May called in Drahi’s stakebuilding for a review, raising further uncertainty over his investment in BT.

Drahi, who has declined to comment on his intentions for BT beyond issuing a statement in support of management and its strategy, has a reputation as a serial dealmaker, renowned for leveraged buyouts and fierce cost-cutting.

A potential sale of Suddenlink comes after a series of abortive deals by Altice. Plans to sell its business in Portugal were halted in January; the US listing of Teads, an ad tech company, fell through last August; and a float of Sotheby’s, the auction house Drahi bought in a $3.7 billion deal in 2019, has gone quiet.

Analysts at Exane told clients with regards to Drahi’s BT stakebuilding that the fall in Altice USA shares, new entrants to the telecoms market in Portugal and the aborted Teads float had “stymied Altice’s ability to raise capital”.

Altice declined to comment on a sale of Suddenlink.

I'm afraid that a natural byproduct of successfully conquering inflation (by raising interest rates) will be a prolonged recession. The fact that there will be economic pain across the board (globally, and not just the UK) is an absolute given. It is the price that has to be paid to dampen global demand for products and services. It will only be then that inflationary pressures will start to ease, although a sustained and escalating conflict in the Ukraine will only serve to delay any recovery, as would another fatal surge in Covid. There is simply no easy and pain free solution to this conundrum. And on that happy note I wish you all a very happy, sun filled day.

Ares1969 .. "Another drop in SP, not sure why".
Markets dragged down by appalling inflation figures in the US.

Yes, I appreciate these are extraordinarily difficult times for the innocent people of the Ukraine and for the markets in general. And, yes, BT features in many tracker funds, but I wholeheartedly agree with Fleccy that the falls in BT are simply unwarranted/irrational, particularly when they exceed the falls in the FTSE as a whole, as was the case last week. Even making a case for the extra stresses these falls will have on BT's Pension Fund, and increased energy prices on operating costs, I still feel that BT is a relatively safe haven in what are clearly turbulent times. Hopefully the markets will recognise, in due course, BT's comparative solidity in a volatile global landscape.

Halves the investment costs, enhances the overall content offering and reduces the risk of customer churn (had BT dropped BT Sport entirely). It's a win win for me and BT. Let's hope they get this over the line, soon!

They have issued a target price of £1.25 today.

Oliver Shah

I’m placing my chips on the oldest of old tech: BT, the unloved former state monopoly that owns the EE mobile brand and Openreach, the spine of the nation’s broadband network. BT shares have been a terrible investment since forever, spending most of the past two decades plodding along at about 200p.

Change is in the air, though. Under Philip Jansen, who replaced Gavin Patterson as chief executive in 2019, BT is focusing on its core mission of rolling out ultra-fast broadband. It is spending £15 billion extending so-called full fibre to 25 million premises by 2026 and is in the process of shedding the expensive non-core asset that is BT Sport.

Telecoms giants have languished on lowly ratings, even though the pandemic has underlined broadband’s status as a key utility. Stakebuilding by French-Israeli tycoon Patrick Drahi could drive a re-rating of BT and might catalyse corporate activity. While some observers are sceptical that a Drahi bid would get past the government or BT’s pension trustees, he could end up flushing out a private equity consortium. In any case, his wildcard presence should put a floor under the share price, currently about 170p.

The tycoon — who has engaged Flint Global, the advisor consultancy co-founded by Ed Richards, the former boss of Ofcom, and Sir Simon Fraser, a former permanent secretary at the department for business, — publicly stated his “full support” for BT’s strategy and has met Kwarteng. He said that he understood the expansion of the broadband network was “one of the UK government’s most important policy objectives”.

Adam Crozier, 57, the former chief executive of Royal Mail and ITV whose first formal day as BT’s new chairman coincided with Wednesday’s manifesto event, listened to the presentations from BT’s senior executives, including Clive Selley, chief executive of Openreach, but did not attend a drinks and canapés reception afterwards.
Jansen and BT’s investor relations team are understood to have presented their strategy to Drahi and his team in a meeting at the London office of one of its advisory banks in the autumn.

Drahi, who has a reputation for aggressive cost-cutting in acquired businesses, is thought to believe that Britain is now one of Europe’s most pro-investment network environments, after securing a pivotal agreement in March with Ofcom, and that BT is undervalued. He is said to view BT as a long-term investment.

Although BT has bolstered its defences, it is not said to be in a heightened state. There is, according to a source, a view that having picked BT up off its knees: “Why would you give it away now?”

On the wall of staircases heading out of BT’s new office reads the message: “Good things are coming.” After difficult years and with uncertainty still ahead, BT’s management will be hoping that at last is the case.
‘Get set for more M&A in telecoms’
The European telecoms market is set to deliver record levels of mergers and acquisitions next year, according to analysts at JP Morgan, BT’s joint house broker.

They said that with valuations at record lows, “we are seeing a scaling wave of private equity buyouts and infrastructure deals”.

Stock market investors struggled with a “buy case” based on the belief that fibre capital expenditure would “roll-off” in the medium term, supporting an “explosion in industry cashflows”, they said, but private equity buyers and infrastructure funds “seem to be closing the duration gap”. They said that “key plays” included BT, Vodafone and Vantage Towers, its infrastructure company.

In recent years 14 telecoms companies have been taken private, including TalkTalk

It has unsettled union bosses. Prospect, the union, wrote to Kwasi Kwarteng, the business secretary, on Thursday urging him “to take personal charge of assessing any takeover”.

Mike Clancy, Prospect’s general secretary, called BT “one of the jewels in the crown of UK innovation and tech R&D” and the union said it “raises fears over whether UK jobs and research will be safeguarded, particularly if any new owner is motivated by a short-term payout rather than long-term returns”.

Openreach’s full-fibre investment is important to the government’s “levelling up” agenda and manifesto commitment. BT’s services also include handling emergency service calls and cybersecurity for government, while Jansen is a member of the government’s Build Back Better Council of industry leaders. In addition to Openreach, the group, which was privatised in 1984, also owns EE, the mobile network, and BT Sport.

A top ten institutional shareholder in BT, speaking confidentially, said yesterday that this week’s manifesto event had showcased the importance of fibre connectivity and that the government would scrutinise any bid for all or part of the company as it was a critical asset at the “heart of Britain’s digital future.

“If [Drahi] is looking to make a bold move, takeover move, he needs to be assured. This is a sort of ‘golden share- type’ situation where you would [need] the go-ahead from government and regulators.” The shareholder added that gaining political and societal support for a deal was not insurmountable, but that there would have to be undertakings covering pensions, employees and investment.

BT, alongside its advisers at Robey Warshaw, the boutique investment bank whose partners include George Osborne, the former chancellor, and Goldman Sachs, has been preparing its defences. It has included adding protection for holders of its $500 million hybrid bond by including a change-of-control clause and it brought forward a £2 billion cost savings target last month and cut its spending forecast.

Drahi, a Franco-Israeli, disclosed his 12.1 per cent stake in BT in June via Altice UK, a financial holdings company incorporated in December 2019 in Luxembourg.

The Swiss-based businessman was able to quickly amass the large holding in BT through derivatives, according to a City source, who said that Drahi could swiftly increase his voting rights through a similarly structured transaction.
Expectations that the businessman could raise his stake were heightened after third-quarter financial results in the middle of last month for Altice International, the entity covering Drahi’s telecoms business in Portugal, Israel and the Dominican Republic, disclosed that a €250 million loan had been granted to Altice UK in early October.

After emerging with his stake in June, Drahi quickly sought to strike a friendly and “on the face of it” supportive tone. The tycoon — who has engaged Flint Global, the advisor consultancy co-founded by Ed Richards.....

BT vulnerable to takeover as Patrick Drahi dials up line of attack
Philip Jansen calls the telecoms company a national champion amid talk of foreign bid, reports Alex Ralph
Alex Ralph
Saturday December 04 2021, 12.01am, The Times

BT may sell its television sport section as it focuses on broadband and builds its defences against any takeover bid from Patrick Drahi.

On stage on the 17th floor of BT’s new headquarters, with the City of London skyline behind him, Philip Jansen and his executive team used a two-hour presentation this week to impress on stakeholders its position as a “national champion”.
“Our network is the backbone of the UK,” Jansen, chief executive of Britain’s largest telecoms group, told the audience. “We’ve made a once-in-a-generation commitment to accelerate digital opportunity — £15 billion to build the UK’s first and only nationwide full-fibre network by 2026.”

Jansen, 54, was launching BT’s “manifesto”, with targets covering diversity and sustainability, after three years of heavy operational lifting centred on big cost-cutting and BT Openreach’s commitment to build full-fibre broadband infrastructure to 25 million premises.

BT’s management, which is considering selling its Sport division, has pledged that after briefly suspending the dividend, a triennial review of its pension fund and repairing relations with the regulator, it is on the cusp of a return to consistent growth.

However, a weak share price, threats from competition, gathering sector consolidation and stake-building by Patrick Drahi, an industry tycoon and BT’s largest shareholder, has left “one of the most recognised brands in the country” potentially vulnerable to an overseas and private equity takeover.

The prospect of a takeover attempt for BT from Patrick Drahi, the founder of Altice, presents another potential dilemma for ministers.

The BT event, at One Braham in Aldgate, was held ten days before the expiration of a six-month period preventing Drahi, 58, from launching a bid. The prospect of a takeover attempt for BT from the founder of Altice, the French telecoms group, and owner of Sotheby’s — or from elsewhere — presents another potential dilemma for ministers, caught between encouraging inward investment while protecting vital British assets.

The situation at BT is being monitored in Westminster and is understood to have been raised by Whitehall officials during their regular meetings with the company.

Any takeover attempt could present an early test of the new National Security and Investment Act, which comes into force in January. Lord Callanan, the business minister, has sought to reassure the City that only a very small number of deals will face intervention under the regime.

Speculation heightened this week before the Drahi date and after a report in India that Mukesh Ambani, the billionaire telecoms tycoon and the country’s richest man, was weighing up a bid. It has unsettled union bosses. Prospect, the union, wr

Ministers on alert over BT as India’s richest man Mukesh Ambani denies takeover rumours
Alex Ralph
Tuesday November 30 2021, 12.00am, The Times

Reliance Industries denied any intention to bid, and BT refused to comment

The government is monitoring the situation at BT amid heightened takeover speculation surrounding Britain’s biggest telecoms group.

Uncertainty intensified yesterday after a report that Reliance Industries, the Indian oil-to-telecoms conglomerate controlled by Mukesh Ambani, India’s richest businessman, was weighing a takeover bid.

Reliance was said by The Economic Times to be in the early stages of considering an offer, seeking to acquire a controlling stake or to partner with BT Openreach’s full-fibre broadband infrastructure investment plans.

Reliance responded by firmly denying that it had “any intent to bid” for BT and it called the report “completely speculative and baseless”.

However, shares in BT closed up 9½p, or 6.1 per cent, at 163½p, having risen as much as 9.3 per cent before the denial. BT is now valued at £16.2 billion.

Heartening interview by Andrew Marr with a South African doctor at the epicentre of the new outbreak this morning. So far all cases handled by her and her colleagues across the region they work in have been mild with no one, as yet, hospitalised. In her view view there is little to worry about, although she did understandably add a caveat that who knows what might happen in two weeks from now. Nevertheless, so far so good.

Outlook for today not looking good at all.

BT’s broadband rivals are poised to launch legal action after Ofcom gave the green light to plans by the former state-owned monopoly to slash prices by £2.4 billion, in a move the challengers claim is aimed at crushing them.

In September, the telecoms regulator waved through plans by BT’s Openreach infrastructure arm to offer customers who piggyback on its underground cables, such as Sky and TalkTalk, a discount of about 30 per cent across the country.

The regulator’s decision on BT’s Equinox pricing plan has triggered a backlash from the so-called altnets, which are set to challenge the decision through the courts. The deadline to challenge through the Competition Appeal Tribunal expires at the end of this month.

The altnets fear being undercut and argue that while BT is offering cheaper prices now, it could raise them later when it has little or no competition.

CityFibre, which is backed by Goldman Sachs and the Abu Dhabi sovereign wealth fund, is expected to lead any challenge on behalf of the altnets. Chief executive Greg Mesch said it was “considering appropriate next steps”.

Gareth Williams, chief executive of Gigaclear, said the rural broadband builder would join legal action led by a rival and that Openreach was trying to “close down infrastructure competition”.

Virgin Media O2, Openreach’s main competitor, said it was keeping all options open.

The dispute comes as BT boss Philip Jansen is under mounting pressure. A lock-up agreement restricting BT’s largest shareholder Patrick Drahi from buying more stock expires next month, amid mounting speculation that he could bid for the company.

Ofcom said: “We’ve ... considered this offer and rivals’ views, and concluded that it does not raise concerns requiring intervention.”

Anticipating an interesting tussle between the bulls and the bears today. Will the Fear of Missing Out (FOMO) on a possible takeover bid (maybe only 6 weeks away) continue to drive the share price up?

Shares in the former state-owned telecoms giant BT jumped yesterday as it emerged that a corporate finance boutique that employs George Osborne had been brought in to help man the barricades against a possible French takeover attempt.

Shares in BT, better known now as a television sports rights-holder than the operator of local telephone exchanges, leapt to an 18-month high this summer when the French cable king Patrick Drahi and his Paris bourse-quoted telecoms group Altice took a £2.2 billion, 12 per cent stake in the UK company.

Despite City chat that Drahi, 58, an Israeli citizen based in Switzerland, may be preparing a bid for BT, the stock has been losing ground in recent months. Speculation yesterday that the game may be afoot again sent the shares rising at the start of the session.

It was subsequently reported by Sky News that BT had appointed Robey Warshaw, the London finance house founded by the longtime Morgan Stanley mergers and acquisitions chief Sir Simon Robey. The firm this year recruited Osborne, the former chancellor, following his stint as editor of the London Evening Standard.

BT shares closed up 8p or 6 per cent at 143¼p. They had opened the week at a seven-month low.

BT is currently valued on the London stock market at £14 billion. Altice is valued on the Euronext market at about £6.4 billion.

The speculation is that Robey Warshaw has been brought in to advise on a situation in which Altice launches a full-blown takeover or Drahi agitates for a break-up. Under his reign, Altice has routinely bought and sold businesses and made bids for assets.

Drahi might also seek to use his stake to force BT to sell its consumer division, which includes the EE mobile phone network, or its broadband infrastructure network, Openreach.

Drahi had made a commitment at the time of his stake acquisition in BT not to launch a takeover for the company, a pledge from which he is released in six weeks’ time.

I carried out an independent review of the facilities some 10 years ago. I met with senior management and carried out a number of in-depth interviews. The management, and the overall setup, was mightily impressive. At the time there were over 3,000 PhD researchers on site and the R&D resource was widely regarded as best in class by the global telecommunications industry. Adastral Park had already initiated several incubator projects by that time. Admittedly 10 years is a long time ago, but I very much doubt BT will have applied the self-destruct button to one of their jewels in the crown. They may be moving to a multi site set up (both domestically and internationally), but l sincerely doubt that they have thrown the baby out with the bath water. After all Adastral Park remains BT's R&D hub and has been underpinned by an overall spend of c£2.5Bn on R&D in the last 5 years.