Mention of ITV & BT18 Aug 2021 17:29
BT should be broken up - just not the way its billionaire raider may want.
New chairman Adam Crozier should consider a blockbuster merger of its consumer wing with ITV.
BT shareholders beware: Adam Crozier has fallen for the dubious charms of an enigmatic foreign guru at least once before. As chief executive of the Football Association from 2000 to 2002, here we have the man who first brought Sven-Goran Eriksson into the English game and rhapsodised on his “absolute belief” in the pricey Swede even after he had launched into his extraordinary streak of tabloid indiscretions.
Now Crozier is chairman of the board at Britain’s former state telephone monopoly as it is drawn into the orbit of its own exotic suitor, the billionaire Patrick Drahi. He is owner of a 12pc stake in BT and, it is widely assumed, has strong views about its strategy that will gain weight when he buys more shares.
After too much chin-stroking under his predecessor Jan du Plessis, Crozier and the BT board do not have much time to set out a path that protects the interests of all shareholders. There are also customers, pensioners, workers, taxpayers, the emergency services and the general public to consider.
All are dependent on BT and may not share the priorities of a French telecoms investor who is a tax resident in Switzerland and best known for aggressive cost-cutting, heavy borrowing against assets and taking advantage in the financial restructuring that it demands.
Nevertheless, perhaps Drahi’s ongoing and energetic efforts in the political background to allay such fears will succeed. There is at least one other big BT investor who would dearly love the newcomer to buy more shares.
Tim Höttges, the chief executive of Deutsche Telekom, substantially detonated any reputation he had as an international deal maker when in 2015 he accepted a 12pc stake in BT in exchange for half of the mobile operator EE.
At the time of deal it was worth £5.1bn. By this time last year, as BT reached one of its periodic nadirs after various accounting scandals and regulatory disasters, Höttges would have been fortunate to get £1.3bn for the shares.
Little wonder that after a slight recovery he is thrilled at the prospect of offloading to Drahi later this year when a regulatory lock-up is lifted. “I think we will see an exciting quarter four with regard to this shareholding,” Höttges told investors last week. The excitement threshold may be low in the German telecoms market, but he sounded sincere.
It all means that if Crozier and Jansen do not take charge of BT’s destiny, others will certainly try.
The good news for them is that despite its weak share price, BT is in many important ways better positioned than it has been for years. It is finally upgrading its broadband network to faster and more reliable fibre, at pace. It will be cheaper to run and more profitable.
Cont.
Sign In
Follow the stocks
