Business

‘I want my money back,’ Deutsche Telekom boss says of BT stake

Deutsche Telekom’s CEO called buying a stake in BT the “biggest mistake” he’s ever made, saying: “I want my money back.”

Tim Höttges told the Financial Times he regrets the 2015 deal when the German group bought a £5.6 billion stake in its British partner, which has lost almost £4 billion in value.

“It’s too early and I don’t fully understand the obstacles surrounding BT,” he said.

Like many of its European peers, the formerly British monopoly has suffered from stagnant profits, stiff competition and falling share prices as it invests billions of pounds in upgrading its ice network. its broadband to all fiber optic cables and deploying 5G technology.

Deutsche Telekom managed to challenge this broader trend largely thanks to a lucrative bet on the US market through T-Mobile US; Its shares have risen more than 60 percent in the past five years.

The German operator has acquired its stake in BT as part of a deal that sees it and France’s Orange sell UK mobile operator EE to BT for £12.5 billion.

Orange settled primarily with cash as part of the sale. But Höttges said he bought a 12% stake in BT because he was “panic” about his exposure to a company that includes both broadband and mobile operations.

Despite billions of dollars lost, Höttges swears he “will get it back,” saying he has a “clear understanding” of the options, including raising more shares in the hopes of good fortune. of BT will be improved or partnered with another major shareholder, without specifying what action they might take.

“I’m not worried, I’ll keep quiet and trade the portfolio when I’m ready. There will come a time when we make a deal,” said Höttges, adding that BT is the “cheapest telecom company” and has a lot of potential to add value.

French-Israeli tycoon Patrick Drahi built an 18% stake in BT, though his ability to build a further stake is challenged by new UK powers under scrutiny and restrictions foreign ownership of assets deemed important to national security.

“Patrick Drahi is one of the smartest cats,” said Höttges, referring to the stake-building in BT. “He was sitting in front of the hole waiting for the rat to be ready to catch it.”

Over the past year, a number of telecom tycoons and private equity groups have bought billions of pounds worth of stakes in what they see as undervalued British telecoms groups. French billionaire Xavier Niel and America’s Liberty Global Group have acquired a share of Vodafonejoins United Arab Emirates telecommunications operator e&, which already holds a 13% stake.

However, Höttges criticized this approach, saying that it risks causing companies to end up unnecessarily split and the need for investment to be pushed aside, which would be “very harmful to customers, very harmful to European sovereignty.” [and] very bad for the infrastructure.”



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