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UK government will not step in over Altice’s growing stake in BT
Telco billionaire purchase A-OK from national security standpoint, apparently, but will he buy up more?
The UK government has declared it will take no further action regarding the purchase of BT shares by French telco billionaire Patrick Drahi, following a national security assessment into his Altice company becoming the largest BT shareholder.
In a statement, the UK government’s Department for Business, Energy & Industrial Strategy (BEIS) said that following careful consideration, the government intended to take no further action on the acquisition of 5.9 percent of shares by Altice in BT, Britain’s former state-owned telecoms operator.
The investigation was announced in May, using powers the government had granted itself under the National Security and Investment Act, following the acquisition of that extra 5.9 percent of BT shares by Altice in December of last year.
Together with the 12.1 percent stake in the company that Altice bought up in June 2021, this took its overall ownership of BT to 18 percent, making Altice, a company wholly owned by Drahi, the largest BT shareholder.
Under the terms of the NSIA, the government had 30 working days to carry out its assessment, but when that deadline passed in early July, the government announced an extension to give itself more time to consider the matter.
The law, which came into force at the start of this year, gives the UK government the power to scrutinize business transactions such as takeovers, and intervene if deemed necessary to protect national security.
With the news that the government will take no further action, Drahi will be free to expand his ownership of BT shares even further, should he wish to. He has previously stated that he does not intend to make a takeover offer for the company.
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However, the government said in its statement that will act to protect the UK’s critical national telecoms infrastructure if it judges this to be necessary, and any future transaction could be subject to a separate assessment under the Act.
BT itself greeted the news with a bald statement that merely said: “BT Group has now been notified by the Secretary of State that no further action is to be taken under the Act in relation to the increase by Altice Europe N.V. of its shareholding in BT Group from 12.1 percent to 18 percent.”
According to Bloomberg, Drahi has publicly supported BT’s business strategy, urging the company to speed up its rollout of fiber broadband infrastructure across the UK.
Telco analyst Paolo Pescatore noted: "While he is not forced to reduce his stake, you cannot rule out moves to increase it further."
He went on to opine that it "feels like the end game seems to be a takeover. One for all key stakeholders, including the UK government, to continue monitoring very closely!"
Also currently under review under the terms of the NSIA is the acquisition of Newport Wafer Fab, the UK's largest chipmaking facility, by Nexperia, a Dutch company that is in turn owned by a Chinese corporation. ®