UK government set to block Drahi-BT takeover

Patrick Drahi

The UK’s business minister Kwasi Kwarteng is expected to block the takeover of BT by Altice owner Patrick Drahi.

According to sources in the City cited by ThisIsMoney, the government is also set to cap any further stake-building from Drahi and may stop him from taking a seat on the board.

In December, Drahi increased his stake from 12% to 18%, making Altice – and by extension Drahi – BT’s largest single shareholder. 

While the French group said that it did not intend on making a takeover bid, the increased stake triggered a six-month period under which it is prevented from making such a move under the takeover code. That six-month lock-up ends today, June 13.

Last month the government’s department for Business, Energy and Industrial Strategy (BEIS) launched a probe into Altice’s BT stake over national security grounds, and the reported conclusion looks set to block any further investment.

While a decision has reportedly been reached on curbing Drahi’s ambitions, the government has until early July to decide whether to take action over the billionaire’s holding in BT under the terms of the National Security and Investment Act. BEIS could extend the review period.

The ThisIsMoney report goes on to note that the government would probably block Drahi from increasing his stake and exercising influence on BT’s board and strategy. The current uncertainty is whether the government will impose sanctions on Drahi’s existing stake.