The French–Israeli billionaire’s 18% stake in the UK’s largest operator is set to be examined by the UK government at the behest of business secretary Kwasi Kwarteng

Today, BT has announced that it has received notification from the UK government that billionaire Patrick Drahi’s newly acquired 18% stake in the company is set to be examined due to national security concerns. 

This comes as a direct result of a decision by business secretary Kwasi Kwarteng, who is exercising new powers granted to him by the National Security and Investment (NSI) Act 2021.

The NSI came into force on January 4 2022, giving Secretary of State the power to ‘call-in’ business transactions for review if they believe the deal could represent a threat to national security.

Earlier this week, Kwarteng had already exercised these powers to call in a review of the takeover of the UK’s largest chip fab, Newport Wafer Fab, by Chinese-backed Nexperia. Sources suggest that other takeovers have also been called in for review without publicity in the past six months.

The investigation into Drahi’s stake does not relate to his entire holdings in the business, but only the most recent 6% he purchases back in December last year.

Drahi formed Altice UK back in June 2021 to take an initial 12.1% stake in BT for around £2 billion. The move immediately made Drahi BT’s largest stakeholder, sparking speculation that the billionaire was seeking to launch a potential takeover. 

Drahi was quick to distance himself from such speculation, however, saying that he did not intend to takeover the business, thereby triggering a legal clause meaning he could not increase his stake for six months. 

During this time, BT set about shoring up its defences against a potential takeover bid, including hiring advisory firm Robey Warshaw LLP to work alongside Goldman Sachs in preparation for a potentially takeover attempt. 

When the December 2021 deadline arrived, Drahi increased his stake in BT from 12.1% to 18%, but once again denied interest in taking over the business. As before, these statements meant that he was not allowed to increase his stake further for the next six months – a new deadline which is now just weeks away and could be the motivation for Kwarteng’s decision to invoke his NSI powers.

“The timing looks linked to Altice’s takeover restrictions lapsing in June, and this may be more a warning about further control being acquired than an objection to the 18 per cent stake per se,” James Barford, an analyst at Enders Analysis, told the Financial Times.

Indeed, given the critical nature of BT’s infrastructure, which carries highly sensitive government data, it seems highly unlikely that the government would allow ownership of BT to be passed to a foreign investor.

This national security assessment is set to last 30 days, though this could be extended to 45 days if necessary. 


What impact does Drahi’s stake in BT have for the wider UK telecoms industry? Find out from the experts at this year’s live Connected Britain event

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