Saudi Arabian sovereign wealth fund ‘builds stake in BT’
Saudia Arabia is thought to be buying up a stake in BT, as the kingdom looks to take positions in blue chip companies at a knock-down price during the pandemic.
The $325bn (£263bn) Saudi sovereign wealth fund, has reportedly been building a stake in BT on the open markets in recent weeks, with the company currently trading at its lowest price in more than a decade.
BT’s closing price on Friday was 118.55p, down from a price of more than 200p in just December 2019. Its market value of £11.7bn is less than it paid to acquire its mobile arm EE in 2016.
The FTSE 100 company has seen significant devaluation as part of a broader coronavirus-driven market slump, but has also struggled with deteriorating investor confidence of late.
The combination has made the company a target of the Saudi Public Investment Fund (PIF), three sources told the Sunday Telegraph, as the kingdom pursues a wider strategy of investing in some of the world’s biggest companies at bargain prices.
Since the pandemic struck, the PIF has disclosed stakes in BP, Shell, Boeing, Live Nation, Disney, Facebook, and Indian telecoms giant Jio Platforms.
The plan is part of Saudi Arabia’s effort to diversify its revenues away from oil, which it is currently dependent on.
Senior executives at BT are said to be convinced that the PIF is building up a stake, albeit at less than the five per cent threshold at which it would be obliged to tell the stock market.
It comes after the two sides reportedly held discussions about the potential issue of new shares to help pay for BT’s multi billion pound rollout of full fibre broadband across the UK.
The telecoms giant did not eventually go down this route, but is thought to be hoping to attract investors such as PIF, whose investments tend to be less driven by dividend payouts than BT’s traditional base of City pension funds.
BT declined to comment.