Billionaire Patrick Drahi’s offensive on the British operator and the KKR investment fund’s offer on its Italian counterpart could announce significant movements in the sector.
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Like any good soap opera, the year 2021 ends with a mixture of action and suspense in the European telecommunications market. Two of the national flowers of the sector could indeed change his hand in the coming months. The KKR US Investment Fund, at the end of November, a public event of interest on Telecom Italia, enhancing the company around € 11 billion. Then, the billionaire Patrick Drahi, already owner of SFR, increased, on December 14, its stake in BT (former British Telecom) at 18%, six months after entering the capital, up to 12.1%.
“The vultures are approaching.” The title of the last Study of the research company Enders Analysis dedicated to BT, dated December 9, is explicit: the British company is a prey that interests the world. At the head of “vultures” is Mr. Drahi. For the time being, the latter assures that “not intend to make an offer” on the operator.
The Franco-Israeli billionaire is certainly far from the 30% threshold which, according to the British regulation, would require it to launch an OPA on BT, the whole of which is currently valued around 18 billion euros. However, the observers in the sector note that this bar could be reached by redeeming, for example, the 12% of Deutsche Telekom in BT.
The appetite around the British telecommunications company is explained by a simple look at its stock market class, which was divided by three in five years. The pound sterling is also relatively low. Seen from abroad, the company suddenly seems to be an excellent deal. “The stock market price is probably close to its low point,” says James Bradford, Analysis Enders. BT has launched in a large investment plan to install optical fiber through the United Kingdom, late country on this technology. These heavy expenses weighed on its accounts, but they should begin to become profitable within a few years.
Difficulties inherent in the market
The interest of the KKR Fund for Telecom Italia responds to a similar observation. The course of the Italian operator was divided by two in five years, but there are reasons to believe in a rebound. Italy also accuses a delay on optical fiber. Nevertheless, the Mario Draghi government wishes to remedy it, which could also lead to medium-term profits.
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