Patrick Drahi ups stake in BT, prompting government threat of intervention

Patrick Drahi’s Altice UK has upped its stake in BT to 18%, prompting warnings from the UK government that it may intervene to protect its “national telecom infrastructure” in the case of a foreign takeover.

Patrick Drahi

Altice UK has confirmed that it does not intend to make an offer for BT – although under Rule 2.8 of the Takeover Code, which commits it to this position for six months, it reserves the right to change its mind in certain circumstances – for example if it secures the agreement of BT or if a third party announces a firm intention to make a bid for the telco.

“We are pleased to take this opportunity to increase our shareholding in BT. Over recent months we have engaged constructively with the Board and Management of BT and look forward to continuing that dialogue. We continue to hold them in high regard and remain fully supportive of their strategy, principally to play the pivotal role in delivering the expansion of access to a full fibre broadband network; an investment programme which is so important to both BT and to the UK,” said Drahi in a statement.

BT’s board for its part said that it had been notified of the upping of Altice’s stake.

“The Board and management of BT Group will continue to operate the business in the interest of all shareholders and remains focussed on the successful execution of its strategy and building on recent performance momentum,” the company said.

The UK government will gain powers in the New Year under the National Security and Investment Act that enables it to block takeovers of ‘national assets’ more easily.

Analysts from Jefferies noted that “such serious intent form Altice contrasts with continuing lack of clarity in the government position over BT”.

Jefferies said it was unclear how Altice’s acquisition of its stake was structured, or over what period of time, but said that it understood Deutsche Telekom had not sold any part of its 12% stake in the company to Altice.