Deutsche Telekom’s chief executive called getting a stake in BT the “biggest mistake” he had ever made, saying: “I want my money back.”
Tim Höttges told the Financial Times he regretted the 2015 deal which saw the German group take a £5.6bn stake in its UK counterpart, which has since lost almost £4bn in value.
“It’s very early and I don’t know all the trouble around BT,” he said.
Like many of its European peers, the former British monopoly has seen stagnant profits, stiff competition and falling share prices as it invests billions of pounds to upgrade its broadband network to full fiber and roll out 5G technology.
Deutsche Telekom has been able to challenge this trend even more thanks to a profitable bet on the US market through T-Mobile US; Shares have risen more than 60 per cent over the past five years.
The German operator acquired a stake in BT as part of a deal that saw France’s Orange sell UK mobile operator EE to BT for £12.5bn.
Orange settled mostly for cash as part of the sale. But Höttges said he took a 12 percent stake in BT because he was “panicking” about gaining exposure to the company’s broadband and mobile operations.
Despite losing billions, Höttges vowed “to get the money back”, saying he had a “clear understanding” of his options, including adding shares in the hope BT’s fortunes would improve or working with other shareholders, without specifying what action that would take. can be done.
“I’m not nervous, I’ll keep quiet, and do portfolio transactions when I’m ready. There will be a time when we’ll do a deal,” Höttges said, adding that BT is “the cheapest telco” and has the potential to increase its value.
Franco-Israeli tycoon Patrick Drahi has built up an 18 percent stake in BT, although his ability to build a holding is further challenged by Britain’s new powers to scrutinize and limit foreign ownership of assets deemed essential to national security.
“Patrick Drahi is one of the smartest cats,” says Höttges, referring to stakebuilding at BT. “He sits in front of the hole waiting when the mouse is ready, to catch it.”
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In the past year, several telecoms tycoons and private equity groups have taken multibillion-pound stakes in what they consider to be an undervalued British telecoms group. French billionaire Xavier Niel and US group Liberty Global have acquired a stake in Vodafone, joining the United Arab Emirates telecoms operator e&, which has built up a 13 percent stake.
However, Höttges is critical of this approach, saying that there is a risk that companies will be separated unnecessarily and investments will have to be removed, which would be “very bad for customers, very bad for European sovereignty. [and] very bad for infrastructure”.