Billionaire BT stalker Patrick Drahi increases stake to 24.5%

Just a shade under the 25% threshold that would spark investigation, but he still doesn't want to take over, honest

French telecoms billionaire Patrick Drahi has upped his ownership of the UK's BT Group to nearly a quarter yet he still insists he does not intend to make an offer for the entire company.

Altice UK, which is wholly owned by Drahi and serves as his investment vehicle, said in a statement it has acquired a further 650,000,000 shares in BT, increasing its stake in the former state-owned telecoms monopoly to approximately 24.5 percent.

Drahi has been gradually buying up BT shares over the past several years. In 2021, Altice UK invested £2 billion ($2.47 billion) to acquire a 12.1 per cent shareholding in the company. That December, the investment vehicle added another 5.9 percent of shares, taking the total to 18 percent and making it the largest BT shareholder.

Although Altice UK said at the time it did not intend to make a takeover offer for BT, the purchase caught the attention even of the British government and sparked an investigation last year into Drahi's growing ownership under the newly forged National Security and Investment Act (NSIA), ordered by then business secretary Kwasi Kwarteng.

Although a publicly traded company, BT still controls much of the UK's telecoms infrastructure, making it a key area of government concern.

The government dragged its heels over the national security assessment, giving itself more time to look into Drahi's purchases of BT shares, before eventually announcing last August that it did not intend to take any further action regarding the matter. In its statement today, Altice UK restated its position to the BT Board that it does not intend to launch a takeover of BT, and it will be bound by that statement for the purposes of Rule 2.8 of the UK's Takeover Code.

That code allows for the restrictions to be set aside if the BT board were to agree to a takeover by Altice UK or if another company were to make a takeover bid for the telecoms giant.

We contacted the Cabinet Office and asked whether the government intended to carry out a further review under the NSIA in light of this latest share purchase, and will update this article if we get a response. We understand that an investigation would be required if any overseas entity were to acquire at least 25 percent of the company, which suggests that Drahi and Altice UK have been careful to avoid this.

BT declined to make any official statement regarding the news, but a spokesperson told us that it could be viewed as an endorsement of the company's strategy and that Altice UK was apparently willing to take a longer-term position on BT's future than some other investors.

Megabuyte chief analyst Philip Carse said that Altice may have exploited the 4-5 percent drop in BT's share price following the company's full-year results last week in order to bolster its stake.

For the 12 months to March 31, BT reported a 1 percent dip in revenue to £20.68 billion ($25.71 billion), but a 50 percent rise in profit after tax to £1.905 billion ($2.368 billion). However, headlines were dominated by the company's intention to shed 55,000 jobs by 2030, or 42 percent of its workforce, to boost profits.

As to Drahi's long-term intentions, PP Foresight analyst Paolo Pescatore told us the telco entrepreneur is "a shrewd operator" with a proven track record of growing his business interests.

Altice started out as a French cable TV business, for example, but has expanded greatly through mergers and acquisitions into an international telecoms concern.

"Increasing its stake out of the blue will certainly raise eyebrows. This could be seen as a strong endorsement of BT's strategy given the relentless drive of rolling out fiber," he said.

"Long-term intentions are unclear as underlined by e& now having a seat on Vodafone's board. The UK government will be keeping a watchful eye over developments as any further moves will be scrutinized in the national interest due to security concerns." ®

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