BT Shares Soar After Mexican Billionaire Carlos Slim Takes 3pc Stake

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BT shares raced to their highest level of the year after Mexican billionaire Carlos Slim snapped up a 3pc stake, writes Leah Montebello.

The British telecoms giant rose 4.3pc, or 5.6p, to 135p – giving it a value of £13.4bn – as it took gains since Allison Kirkby became chief executive in February to 20pc.

The rally came after Slim – at one point the world’s richest man – snapped up a 3.2pc holding through his family business Inbursa.

The Daily Mail understands BT only found out about the investment when it was disclosed to the authorities.

Slim is the latest high-profile investor on the share register alongside billionaire telecoms tycoon Patrick Drahi and German group Deutsche Telekom.

The backing from one of the world’s richest men may be seen as a vote of confidence in BT under Kirkby.

But Slim’s motive remains unclear, and, according to sources, he has yet to make contact with BT, a spokesman for the Mexican stating only that it is a “financial investment like many the group makes”.

So who is Slim, and why is he eyeing up the company?

The businessman, 84, made his fortune through telecoms giant America Movil, which dominates the Latin American market with 384m customers.

His parents are Lebanese but moved to Mexico as children. His father Julien Slim Haddad opened a dry-goods store in Mexico City before snapping up property on the cheap.

This financial savvy was passed on to his children and by the age of 12 Slim had shares in the Bank of Mexico and was keen to be an entrepreneur.

Starting as a stockbroker, Slim bought major stakes in Mexican construction, consumer goods, mining and property firms.

At one point he held a 17pc stake in The New York Times newspaper.

But his real money spinner was America Movil, which was formed in 2000 and saw Slim become the world’s richest man in 2010.

His empire suffered following Donald Trump‘s US presidential election win in 2016 as global markets tumbled and Mexico’s peso fell to a record low.

He fell down the wealth rankings and today he is the 17th richest person in the world, with a £72bn fortune.

However, those close to Slim say that despite his mega wealth, he remains relatively frugal.

He has reportedly lived in the same six-bedroom house for 40 years and has kept business in the family by carving up his empire between his three sons and three daughters.

His push for BT will raise eyebrows about whether British telecoms are becoming a foreign affair.

United Arab Emirates-based group E& recently bought a 14pc stake in Vodafone, while Xavier Niel, the French billionaire founder of Iliad, owns a 2.5pc of it.

At BT, Switzerland based Drahi is the biggest shareholder with a 24.5pc stake while Deutsche Telekom has a 12pc holding. Slim’s 3.2pc slice is valued at £430m.

Enders Analysis telecoms expert Karen Egan said Slim could shift power away from Drahi, whose stake has fuelled speculation that he may wish to launch a takeover bid.

“It will further dilute any prospect Drahi had of having influence at BT,” she said.

Kester Mann, analyst at CCS Insight, said Slim may have eyes on a bigger stake himself – and could even buy out Drahi.

“Slim’s move on BT could form a beachhead, having recently reduced his interest in Dutch operator KPN,” he said. “Should that be the case, he may find a willing seller in Patrick Drahi.”

BT’s share price is still down more than 70pc since the peak in 2015 and Slim’s investment comes at a crucial time.

Carlos Slim
BT
SLIM’S REAL MONEY SPINNER WAS AMERICA MOVIL. (PHOTO ILLUSTRATION BY BUDRUL CHUKRUT/SOPA IMAGES/LIGHTROCKET VIA GETTY IMAGES)

Some analysts believe that the move is a vote of confidence in Kirkby.

Last month she outlined her blueprint, which included another £3bn of cost-cutting, sending shares up more than 17pc in a day. As such, the latest rise on the back of Slim’s investment will no doubt be welcomed by Kirkby and her lieutenants.

However, the board, which is led by chairman Adam Crozier, will want to know precisely what Slim is planning.

Sophie Lund-Yates, an analyst at Hargreaves Lansdown, said: “It potentially opens the door to some interesting developments down the line.”

Source: Business Plus