The UK government is to review Patrick Drahi’s stake in BT, using new powers that allow it to review foreign takeovers in businesses it believes are integral to national security.
Drahi, the French-Israeli founder of Altice and owner of auction house Sotheby’s, surprised many in the industry when he acquired a 12% stake in BT for £2.2 million in June 2021 – a move that made him the company’s largest single shareholder.
He then invested another £1 billion to increase the stake of his Altice UK vehicle to 18% in December, making a legally-binding commitment not to launch a takeover bid for another six months.
That period is due to come to an end on June 14, fuelling speculation that he could look to exert even more influence on the country’s largest telecommunications provider, or even stage a full takeover. It has been previously suggested that Deutsche Telekom’s 12% stake could be of interest.
With the government viewing BT’s investment in full fibre and 5G networks crucial to its wider economic and policy aims, coupled with the fact the telecommunications infrastructure is increasingly an issue of national security, it has decided to review Drahi’s interests.
The National Security and Investment Act came into effect at the start of this year and provides ministers with the ability to intervene if it believes there is a risk.
“The acquisition by Altice of 6% of shares in BT has been called-in for a full national security assessment by Business Secretary Kwasi Kwarteng today,” the Department for Business, Energy & Industrial Strategy confirmed.
“The government has powers under the National Security and Investment Act 2021 to scrutinise and – if necessary – intervene in qualifying acquisitions on national security grounds.
“The government has 30 working days (extendable by up to a further 45 working days) to carry out that assessment. That process is underway.”