BT stake ‘biggest mistake for Deutsche Telekom’ says CEO
Deutsche Telekom CEO Tim Höttges has decided the company’s stake in BT was its “biggest mistake”.
In an interview with the Financial Times, Höttges said he regretted a 2015 deal that saw Deutsche Telekom take a £5.6bn stake in BT.
“I want my money back,” said Höttges (pictured). “It was too early, and I didn’t understand all of the obstacles around BT.”
This is very different from his comment to Capacity five years ago, when he defended his decision to take shares in BT in exchange for Deutsche Telekom’s 50% stake in EE, the mobile operator.
Orange, which had held the other 50% of EE, took an initial 4% stake in BT and then sold all its remaining shares.
Capacity is aware that in 2015, when BT, Deutsche Telekom and Orange were negotiating the EE acquisition, Höttges and Deutsche Telekom were aiming to put themselves in a position to buy BT.
Höttges is known to have told a well-connected consultant in the industry of his plans at the time. That consultant passed the information on to Capacity, on condition of anonymity.
However the deal turned sour for Deutsche Telekom, partly because of the drop in BT’s share price in May 2016 BT’s shares were trading at around £4.52 each. Today they are approximately £1.40.
But the pound/euro exchange rate after the UK’s Brexit vote makes Deutsche Telekom’s shares worth even less, from €5.92 back in May 2016 to €1.59 now – just 27% of their value seven years ago.
Höttges told the Financial Times he “will get that money back”. He said: “I am not nervous, I will stay quiet, and do the portfolio transaction when I’m ready to do so. There will be a time when we will do a deal.”
The biggest shareholder in BT is now Patrick Drahi, who has owned 18% since December 2021.