According to sources familiar with the situation, Indian billionaire Sunil Bharti Mittal is contemplating increasing his stake in BT, following his acquisition of a 24.5 percent interest in the UK telecoms company last year. Mittal purchased the BT stake from Patrick Drahi’s Altice in August of the previous year and has privately suggested the possibility of expanding his investment through Bharti Enterprises, as BT undertakes restructuring and cost-cutting measures under CEO Allison Kirkby.
Mittal is currently in the process of converting his 24.5 percent stake, part of which was acquired via derivatives contracts, into equity, according to knowledgeable sources. He initially took a 10 percent holding last year, increasing it to 24.5 percent after receiving national security approvals in December. As the founder of Bharti Airtel, one of the largest network providers globally, Mittal has indicated a long-term investment perspective in BT.
James Ratzer, an analyst at New Street Research, estimates that Mittal has converted approximately 16 percent of his total stake into equity. Further increases in Mittal’s BT holding are not expected until the completion of this process, sources indicate. Ratzer commented on the strategic logic of increasing Mittal’s stake due to the ongoing fiber rollout at BT, which adds considerable value to the company.
A representative from Bharti stated that the company currently has no plans to acquire more than the already declared 24.5 percent stake. BT declined to comment on the matter. In August of the previous year, Bharti declared no intentions to make a full offer for BT. According to UK takeover regulations, the company could not bid for BT for six months following that announcement, a restriction that expired the previous month.
If Mittal increases his stake to 30 percent or more, UK rules would necessitate an offer for the entire company. An increase to 25 percent or more would require renewed national security clearance. Mittal has played an active role in his investment in BT, engaging in discussions regarding the business and its strategy with BT’s leadership. Sources indicate that Mittal feels a shared history with the UK telecoms company, a former minority shareholder in Bharti Airtel during the late 1990s.
Additionally, a source mentioned Mittal’s openness to being actively involved with BT, a contrast to the approach earlier taken by Drahi. Kirkby announced in May a strategy to achieve additional cost savings of £3 billion by the end of 2029. The company also plans to reduce its workforce from 130,000 in 2023 to between 75,000 and 90,000 by 2030, with progress on track according to company insiders.
Under Kirkby’s leadership since February of the previous year, BT’s share price has surged over 50 percent, reflecting investor confidence.
