LONDON, Aug 12 (AFP): Shares in British telecoms group BT jumped over six percent Monday after the conglomerate run by Indian tycoon Sunil Bharti Mittal agreed to buy almost one quarter of the company.
BT said in a statement that Bharti plans to acquire the 24.5-percent stake in BT owned by Altice UK, which is led by French billionaire Patrick Draghi.
Bharti Global is buying 10 percent immediately, with the remainder purchased following regulatory approval, in the hope of replacing Altice UK as BT's largest shareholder.
Bharti must pass UK security clearances-owing to the sensitive nature of the telecoms sector-before acquiring all of the near 25-percent stake, which is valued at about £3 billion ($3.8 billion) according to BT's market value ahead of the announcement.
Bharti Global is the international investment arm of Bharti Enterprises-owner of Indian telecoms giant Bharti Airtel.
BT chief executive Allison Kirkby said the "scale of investment from Bharti Global is a great vote of confidence in the future" of the group.
Bharti said it "endorses BT's goal to transform the UK's telecoms landscape by building fibre, rolling out 5G technology and developing market-leading services".
In reaction, BT shares were up 6.4 percent in late morning trading, pulling London's top-tier FTSE 100 index higher.
"Inevitably there will be speculation about what Bharti intends to do with its stake but, for now, it is ruling out any bid for (all of) BT," noted Russ Mould, investment director at AJ Bell.
"Management will be glad to hear Bharti are supportive of the company's current strategy, although clearly they will want to see evidence of progress that can revive a share price which has gone nowhere in the last five years."
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