11th June 2021
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- Billionaire buys £2bn stake in BT
- Boardroom gender balance improving but not ethnic diversity
Yesterday's market moves
FTSE 100 +0.1% 7,088
FTSE 250 -0.7% 22,609
Markets ebbed and flowed as investors digested the news that US inflation is 5% - the fastest rate since 2008. Closer to home concerns remain that so-called “freedom day” could be pushed back beyond 21st June, this weighed on travel and leisure stocks. All eyes will be on Boris Johnson when he confirms lockdown easing plans on Monday.
Billionaire buys £2bn stake in BT
What’s going on?
Altice, France’s second largest telecoms operator controlled by billionaire Patrick Drahi, bought a 12% stake in BT worth £2 billion. Altice is now BT’s largest shareholder, just ahead of German telecoms giant Deutsche Telekom.
Why is this important?
12% is a pretty chunky holding to take almost overnight in one of Britain’s biggest companies. As we mentioned earlier in the week with Aviva, this is the sort of behaviour of activist investors.
Although Drahi has ruled out a full-blown takeover, it’s likely that he will try to influence BT’s management and strategy.
What’s behind the move? Drahi said he believes BT has a compelling opportunity to deliver the expansion full-fibre broadband throughout the UK. This comes just weeks after BT announced plans to invest billions in getting full-fibre broadband connections to 20 million homes by 2026.
Who is Patrick Drahi? He’s quite the globetrotter holding French, Moroccan, Portuguese and Israeli citizenship and now lives in Switzerland. He founded Altice over 20 years ago and has made investments in telecoms businesses in the US, Portugal and Israel. He has a keen interest in art, owning works by Picasso, Matisse as well as the auction house Sotheby’s.
Forbes estimates his net worth at over $12 billion.
BT has tried to play it cool saying they “welcome all investors who recognize the long-term value of our business and the important role it plays in the UK”. But given Drahi’s track record in the industry it’s more than likely that he will want to shake things up at BT to maximise his returns.
The market took the view that the announcement was a boost for BT with shares up almost 7% on the day.
Boardroom gender balance improving but not ethnic diversity
There’s a mixed picture of diversity in the 350 biggest public companies in the UK. That’s according to a report by executive head-hunter Heidrick & Struggles:
- About half of appointments to FTSE 350 boardrooms were women in the past year, in line with the year before.
- Over the same period only 3% of board hires were Black.
“We expect to see a growing focus on adding directors of black and Asian descent,” the report said. "We believe it's crucial that boards don't trade off one form of diversity for another and instead ensure that there's room in the room for everyone."
In the wake of historic Black Lives Matter protests last year, British businesses committed to making themselves more diverse. But change has been slow.
This comes on the same day that research from Henley Business School showed that British businesses with targeted measures specifically aimed at supporting ethnic employees reported better staff output and loyalty, as well as higher revenue.
Stat of the day
Warren Buffett generated 95% of his wealth after the age of 65
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