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UK government warns it could step in to block full takeover of telecoms company
The billionaire Patrick Drahi has increased his stake in BT to 18%, prompting the government to warn it could step in to block a full potential takeover of the British telecoms giant.
Drahi’s telecoms group Altice UK, which in June paid £2.2bn for a 12.1% stake to become BT’s largest shareholder, has paid about another £1bn to further boost its shareholding.
“We are pleased to take this opportunity to increase our shareholding in BT,” said Drahi. “Over recent months we have engaged constructively with the board and management of BT and look forward to continuing that dialogue.”
Drahi, who had been blocked under UK takeover rules from making a further move until 11 December, played down the stake-building and reiterated that he did not intend to make an offer for BT, but said that could change if circumstances did – including if a third party made an offer.
“We continue to hold them in high regard and remain fully supportive of their strategy, principally to play the pivotal role in delivering the expansion of access to a full-fibre broadband network; an investment programme which is so important to both BT and to the UK,” Drahi said.
A government spokesperson said it would “not hesitate to act” to protect BT from foreign takeover if necessary.
“We are monitoring the situation carefully,” a spokesperson said. “The government is committed to levelling up the country through digital infrastructure, and will not hesitate to act if required to protect our critical national telecoms infrastructure.”
Britain has become more wary of threats to the economy and national security posed by the sale of certain UK companies to foreign rivals and private equity firms.
The government has already ordered investigations into deals including the $75bn (£57bn) takeover of the Cambridge-based chip designer Arm by its US rival Nvidia.
From January, the government will gain tougher powers to block the takeover of important national assets, which BT would certainly be designated, under the National Security and Investment Act 2021.
The board of BT, which since 1 December has been headed by the former ITV and Royal Mail chief executive Adam Crozier, said it will continue to act in the interest of all shareholders.
“The board and management of BT Group will continue to operate the business in the interest of all shareholders and remains focused on the successful execution of its strategy and building on recent performance momentum,” the company said.