BNP, Morgan Stanley Advised Drahi on $3 Billion BT Stake Buy

(Bloomberg) -- BNP Paribas SA and Morgan Stanley helped advise and fund billionaire Patrick Drahi’s purchase of a 12% stake in U.K. telecommunications operator BT Group Plc, according to people familiar with the matter.

The roughly 2.2 billion-pound ($3.1 billion) purchase, made via Drahi’s newly-created company Altice UK and revealed on Thursday, was financed with the use of derivative instruments, the people said. Other banks were involved in helping to arrange the purchase, one of the people said, asking not to be identified as the matter is private.

Representatives for Altice UK, BNP Paribas and Morgan Stanley declined to comment.

Structured deals using derivative instruments are a focus area for investment banks as the fees on such transactions can be lucrative. BNP Paribas and Morgan Stanley are close to Drahi and have advised the billionaire investor on transactions in the past.

An Altice spokesperson said Thursday that the stake had been acquired over the past few days. Blocks of 456.21 million BT shares bought at a price of 178.05 pence apiece were reported on June 7, June 9 and June 10, according to data compiled by Bloomberg.

The transaction marked a return to form for the deal-hungry Drahi, who established himself by buying and selling small cable companies in France. He later embarked on a debt-fuelled acquisition spree that turned his modest cable TV and phone group into one of the world’s biggest media and telecom companies.

Although Altice said it would not pursue a takeover offer for BT, U.K. rules mean that it could choose to do so after six months.

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