Bharti buys Altice's stake in BT

The deal has naturally set tongues a-wagging. But although it was an unexpected move from Bharti, ultimately it makes a lot of sense to all parties.

Details of the arrangement are thin on the ground, from a pounds and pence perspective, at least. Neither Bharti nor BT disclosed the value of the deal, and there has been no comment from Altice.

What we do know is that Bharti Global's Bharti Televentures UK arm has agreed to buy an initial 9.99% stake in BT from Altice, followed by another approximately 14.51% holding once it has received the required regulatory approvals.

It's also pretty clear that this in a financial investment from the Indian group, and not a takeover bid.

"Bharti has no intention of making an offer to acquire the Company and is bound by the terms of Rule 2.8 of the UK Takeover Code in that respect," the firm said, in a statement. Amongst other things, that rule means it would be unable to make a bid for BT for at least six months, even if it wanted to.

Bharti noted that it backs BT's executive team and its strategy, and described its decision to buy into the company as "a vote of confidence in the UK as an attractive global destination for investment, with a stable business and policy environment attractive for long-term investors." It also reminded us that it has history with BT, the UK telco having held a minority stake in Indian mobile operator Bharti Airtel in the 1997-2001 period.

"BT has a strong portfolio of market leading brands, high-quality assets and an experienced management team with a compelling strategy mandated by the BT Board to deliver value over the long term, which we fully support," said Sunil Bharti Mittal, Chair of Bharti Enterprises.

"We review global investment opportunities in the world of technology from digital infrastructure to software," added Shravin Bharti Mittal, Managing Director of Bharti Global and Founder of long-term global tech investment firm Unbound.

"BT is well known to us from the long association with Bharti, so we are pleased to have this opportunity to acquire a significant stake in the company," he said. "We believe that BT is poised for leadership in the telecom arena, especially home broadband services."

It could well be a good time to invest in BT. The telco's shares are arguably still undervalued, but tracking in the right direction, and new CEO Allison Kirkby has made a broadly positive start to her tenure this year.

And Bharti is not the only big name eyeing the UK group. This latest announcement comes just weeks after a trio of Carlos Slim-backed companies picked up 3.16% of BT's shares, again as a financial investment rather than a strategic one.

And Altice is likely selling through necessity, rather than choice, embroiled as it is in a large-scale deleveraging plan that has seen it hive off assets over the past months; it found buyers for its data centres business and media unit, and its French fibre operations and Portuguese business are also on the block.

Although we don't have a price for the BT deal, it's safe to speculate that it represents a fair chunk of change.

For its part, BT is taking the Bharti buy-in as a ringing endorsement of its strategy and direction.

"We welcome investors who recognise the long-term value of our business, and this scale of investment from Bharti Global is a great vote of confidence in the future of BT Group and our strategy," said CEO Kirkby.

"BT has enjoyed a long association with Bharti Enterprises, and I'm pleased that they share our ambition and vision for the future of our business. They have a strong track record of success in the sector, and I look forward to ongoing and positive engagement with them in the months and years to come," she said.

BT and Bharti both now have a vested interested in seeing that share price continue to head northwards.