Over national security concerns, the government will investigate French billionaire Patrick Drahi’s growing holding in BT, according to the telecom company.
In December, Mr. Drahi’s company, Altice, upped its investment from 12 percent to 18 percent, sparking rumours that the company would face a takeover proposal.
The move will now be investigated by the Business Secretary, who will use new powers granted by the National Security and Investment Act to do so.
BT stated that it would cooperate with the investigation.
Business Secretary Kwasi Kwarteng was using his “call-in power” under the National Security and Investment Act 2021, according to BT.
The new legislation, which took effect earlier this year, gives the government the authority to scrutinise, condition, or veto acquisitions based on national security concerns.
BT is in the midst of a revolutionary effort to develop a national broadband fibre network, a strategy that is critical to both the firm and the government’s stated goal of boosting regional growth.
In London, BT’s stock dropped 4% in morning trading.
Mr. Drahi, who also owns the auction company Sotheby’s, began purchasing BT shares in June of last year. He became the firm’s top stakeholder after purchasing slightly over 12% of the corporation for £2.2 billion.
He currently owns 18 percent of BT, just 12 percent short of the 30 percent threshold required by takeover regulations to make a full-company offer.
Mr. Drahi’s investment in BT has spurred speculation about other potential bidders.
Altice stated in December that it “did not intend to make an offer for BT” after learning of Mr. Drahi’s increasing stake.
Mr. Drahi was forbidden from making such a move for six months under British takeover rules.
That explains the timing of the investigation, according to Karen Egan, a telecom analyst at Enders Analysis.
“We’re practically in June, and that was December, so it’s no surprise we’re seeing this now,” Ms. Egan said.
She claimed the administration was trying to “get ahead of the crisis” by warning Mr. Drahi not to “presume” that a proposal would be accepted