The government has requested additional information regarding billionaire Patrick Drahi’s deal to increase his stake in BT to 18% and could potentially block the move as part of new legislation
Today, reports from Bloomberg suggest that the government is seeking yet more information about billionaire Patrick Drahi’s increasing stake in BT.
The official deadline for the national security investigation’s conclusion was roughly a week ago, with the government now suggesting it needs more time to reach a conclusion.
French-Israeli billionaire Patrick Drahi first took a stake in BT back in the summer of 2021, specially forming Altice UK in order to buy a 12.1% stake for £2 billion.
The investment immediately triggered warning bells for BT’s management, with many onlookers suggesting that this initial investment from Drahi was merely a prelude to a larger takeover attempt later in the year.
Drahi, however, was quick to allay these fears, saying that he had no intention of launching a takeover bid. Following this statement of intent, UK law dictated that Drahi could not further increase his stake for six months, giving BT a window in which to shore up their defences.
But when the six-month deadline arrived, BT were not faced with the dreaded takeover bid but rather Drahi’s next step in stake-building, with the billionaire seeking to increase his stake from 12.1% to 18%. Once again, Drahi said that he had no interest of taking over BT, thereby removing his ability to increase his stake for another six months.
However, before this latest deadline could arrive in June this year, the UK government intervened, with business secretary Kwasi Kwarteng using new powers granted by the National Security and Investment (NSI) Act 2021 to investigate stake increase on the grounds of national security. The results of the probe could see conditions imposed upon the deal, or even block it entirely.
This investigation was expected to have concluded by the start of July, but it seems the government wants yet more information before making their decision. A new deadline for the investigation’s conclusion has yet to be announced.
A similar investigation into Nexperia’s purchase of Newport Wafer Fab, announced at a similar time to the BT probe, is also being delayed.
The investigation comes at a time of great uncertainty for both BT and the UK government itself.
Last week saw UK ministers resign in droves, forcing the resignation of prime minister Boris Johnson and triggering a leadership race within the Conservative party. Kwarteng was notably not among the list of over 50 MPs who resigned.
Meanwhile, BT could be facing its own internal uprising, with the Communication Workers Union (CWU) confirming at the end of last month that workers were prepared to strike after BT announced that workers would receive a flat raise of £1,500 for 2022 – a pay cut in real terms, given the UK’s inflation of over 11%.
At the end of last week, the CWU said that BT had until the 13th of July to enter formal negotiations over pay, or else see strikes implemented.
"In short, next week we will either enter into serious negotiations with the company or we will announce strike action. The ball is firmly in the company’s court," said the CWU in an email to members.
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