UK government to take no action on Drahi stake in BT

Patrick Drahi

The UK government is to take no further action in relation to French telecom tycoon Patrick Drahi’s stake in BT.

“Following careful consideration, the government will take no further action on the acquisition of 5.9% shares by Altice in BT and the Final Notification has been issued to parties,” the Department for Trade and Industry said in a statement.

Business secretary Kwasi Kwarteng called the acquisition of an additional 5.9% stake in the UK telco by Drahi’s Altice in for a full national security assessment in May. Altice previously held a 12% stake in the telco.

Altice increased its stake BT from 12% to 18% in December, prompting warnings from the government that it could intervene to prevent a full takeover.

Kwasi Kwarteng

Kwarteng’s decision to kick off a review came a few weeks ahead of a deadline that would open BT up to a potential takeover bid by Altice. The French group said at the time it upped its stake that it did not intend to launch a takeover bid, triggering a six-month period under which it is prevented from making such a move under the takeover code.

It has always. been considered unlikely that the UK government would permit a foreign company to acquire BT given its involvement in national security work. BT’s role in extending connectivity nationwide likely also came into play in considering any risks associated with Altice upping its stake.

Subsequent to Kwarteng’s high-profile intervention press reports appeared suggesting that the government would cap any further stake-building from Drahi and may stop him from taking a seat on the board.

Uncertainty about the fate of Altice’s existing stake remained, but has now been cleared up, leading to a rise in the telco’s share price.

The DTI could still intervene if Drahi decides to up his stake further. It noted in its statement that “any future transaction could be subject to a separate assessment”.

The UK government last year gave itself powers to scrutinise and potentially intervene in market acquisitions on national security grounds under the new National Security and Investment Act.