Home Money BT Boss brokered key sale for Indian tycoon Sunil Bharti Mittal

BT Boss brokered key sale for Indian tycoon Sunil Bharti Mittal

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Towering ambition: BT boss Allison Kirkby helped arrange share sale to Sunil Bharti Mittal

The BT boss helped negotiate the sale of almost a quarter of the business to Indian billionaire Sunil Bharti Mittal, the

Sunday’s mail understands. Allison Kirkby, who took over as head of the telecommunications giant last February, organized the talks in which a deal was reached for the sale of French tycoon Patrick Drahi’s 24.5 percent stake, according to a source.

The intervention last summer was said to have come amid growing fears that Drahi could be forced into a fire sale of his stake to help pay off a £47bn debt pile at his Altice conglomerate.

Drahi appears to have been caught out by defusing when rising interest rates caused his debt bill to skyrocket. Allice was also struggling after a corruption investigation into her activities in Portugal.

“You don’t want a distressed seller with a stake that size,” the source said.

A deal was eventually agreed to sell Drahi’s stake to Bharti in August. The price was not disclosed, although the stake size is now approximately £3.4bn.

Towering ambition: BT boss Allison Kirkby helped arrange share sale to Sunil Bharti Mittal

It is unusual for a CEO to be involved in conversations about shareholder structure, as they typically focus on the day-to-day running of the business. The task is usually left to the president.

While Kirkby may have helped foster talks, the source said chairman Adam Crozier had been “very aware and involved” with the deal.

The purchase went through a national security review before being approved by ministers in December.

Drahi still has a presence in the UK, having bought London auctioneer Sotheby’s in 2019 for £3bn through his family office.

The deal has reversed BT’s relationship with Bharti. From 1997 to 2001, BT owned 21 percent of Bharti Airtel, and had two board members, as it became an early backer of the tycoon’s Indian telecoms business. The firm is now the world’s third largest mobile service provider, with Bharti’s personal and family wealth estimated at £25 billion. It is also the majority shareholder in Airtel Africa, another FTSE 100 telecommunications giant.

All hands on: Allison Kirkby is understood to have known Sunil Bharti Mittal before negotiations began

All hands on: Allison Kirkby is understood to have known Sunil Bharti Mittal before negotiations began

It is understood Kirkby knew him before negotiations over Drahi’s involvement in BT.

Bharti’s history with BT appears to have allowed Kirkby to shore up its job cuts strategy, with the new dominant shareholder said to be aligned with its plan. ‘Bharti is very supportive of Allison. “They both seem to share an impatience about continuing to transform the business,” the source said.

Karen Egan, at Enders Analysis, said BT’s main focus would be how to recoup the huge amounts of cash it has been spending on an ambitious push to launch fiber broadband internet across the UK.

“It needs to get on with it,” Egan said, adding that the group would want to avoid ‘unpleasant surprises’ arising from its global international division of BT. Egan agreed that Bharti was “very supportive” of the current strategy and that the Indian giant would likely be “encouraging the company to digitalize faster.”

BT will deliver a trading update on Thursday on the final quarter of 2024. Markets forecast the telecoms group will post sales of £5.2bn, down from the £5.3bn delivered in the three months to December 31, 2023 .

This year presents new challenges for Kirkby. EE, owned by BT, will be removed from its perch as the UK’s largest mobile network after a merger between rivals Vodafone and Three was approved by competition regulators in December.

The £16.5bn tie-up will create Britain’s largest mobile network with 27m customers.

But Kirkby is also tasked with pushing through plans to cut jobs from 130,000 in 2023 to between 75,000 and 90,000 by 2030 to shave billions from BT’s cost base.

The group is looking to sell or break up its international arm, which the group has been separating from the rest of the business.

So far, shareholders seem relatively optimistic about the plans, as well as Bharti’s arrival on the register, with the company’s share price rising 22 per cent in the last 12 months.

But Kirkby will need to watch another billionaire investor leave his mark on the company.

Carlos Slim, an 84-year-old Mexican business magnate, bought a 3.2 percent stake in BT in June before increasing his holding to 4.3 percent in September.

BT declined to comment.

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