The BT (LON: BT.A) share price collapsed by more than 4% on Tuesday as investors reacted to the latest actions by Patrick Drahi. The stock is trading at 164.90p, which was about 9% below the highest level on Monday. The stock is still about 22% from the lowest level on October 25th.
Patrick Drahi boosts BT stake
BT Group has been in the spotlight in the past few months after Patrick Drahi announced a 12% stake in the company. This made his company, Altice, the second-biggest shareholder in the telecommunication company.
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After he acquired the stake, Drahi had until Friday last week to make a definitive bid for a company. In the past two months, BT announced that it was hiring advisors to defend itself against any acquisition offer.
On Monday, it was reported that Drahi had boosted his stake in the company. He did that by acquiring another 585 million shares, bringing his total ownership to 18%. It is worth about 3 billion pounds, making him the biggest shareholder in the firm. He also reiterated that he was not seeking an outright purchase of the company.
The BT share price is declining after UK government ministers said that they will defend the company because of its importance to the UK economy. In a statement, a minister said that the government as monitoring the situation and will “not hesitate to act if required to protect to protect our critical telecommunication infrastructure.â€
The intrigues came a few weeks after the UK passed the National Security and Investment act. This act, which will come into effect on Monday. The goal is to scrutinize takeovers of UK firms by foreigners. Regulators have already put brakes on Nvidia’s acquisition of Arm Holdings. They have also intervened on Meggit’s acquisition by an American firm.
BT share price forecast
The four-hour chart shows that the BT share price has been in an overall bullish trend in the past few weeks. The stock has formed an ascending trendline that is shown in black. It has also moved slightly below the 25-day and 50-day moving averages. It is also slightly above the 38.2% Fibonacci retracement level while the Relative Strength Index (RSI) has tilted lower.
Therefore, despite the current dip, there is a likelihood that the stock will continue rising in the near term. If this happens, the stock will likely retest the upper side of the rising channel.
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