Billionaire Patrick Drahi faces security probe into his BT stake


Billionaire Patrick Drahi faces security probe into his BT stake amid fears he could launch a takeover bid as soon as next month

Billionaire Patrick Drahi faced fresh scrutiny over his BT stake after the Government launched a review amid national security concerns.

There are fears that the Frenchman could launch a takeover bid for the telecoms giant as soon as next month, which could hand him control of BT’s Openreach broadband empire as well as sensitive state contracts.

Business Secretary Kwasi Kwarteng has deployed powers granted under the National Security & Investment (NSI) Act to examine Drahi’s decision to increase his holding in the FTSE 100 group from 12.1 per cent to 18 per cent in December last year.

Security concerns: French billionaire Patrick Drahi (pictured) increased his holding in the FTSE 100 telecoms giant BT  from 12.1% to 18% in December last year

Kwarteng now has up to 45 days to assess the national security implications of the shareholding. BT said it will ‘fully cooperate’ with the Government’s review.

Drahi owns the BT stake through his firm Altice and is the company’s largest shareholder.

The 58-year old, who also owns auction house Sotheby’s, stunned the market last June when he declared he had bought just over 12 per cent of BT.

He increased the holding in December but said he did not intend to make an offer for the company despite speculation.

 

Under City rules, the statement meant Drahi was barred from making an offer for BT for six months unless he agreed a takeover with the firm’s board or another buyer tabled a bid.

However, this prohibition is set to expire on June 14, which may have spurred the Government into action.

Altice declined to comment on the review but it is understood the firm will cooperate with the Government’s investigation.

Ben Barringer, research analyst at investment manager Quilter Cheviot, said: ‘The timing of this review into Drahi’s stake in BT is interesting. 

The fact he has been raising his stake has been well known and is not news, so the fact the Government has decided to act now shows it may want to be seen to flex its muscle on key national infrastructure.’

BT shares fell 2.3 per cent, or 4.35p, to 185.55p following the news.

While Drahi keeps a low profile publicly, in the business world he is known as a corporate swashbuckler and deal maker.

He has also garnered a reputation for ruthlessness and is dubbed the ‘cost killer’ by French trade unions for cutting workforces and slashing salaries and spending.

The probe into Drahi’s stake in BT came less than a day after the takeover of Newport Wafer Fab, the UK’s largest microchip maker, was called in for review amid concerns about its owner, a subsidiary of Chinese firm Wingtech.

It is also thought other takeovers have been quietly called in since the NSI Act came into force at the start of this year.

Concern over who controls BT comes as the firm embarks on a massive effort to expand the UK’s fibre broadband network in a bid to boost growth in Britain’s regions. 

It also performs sensitive work for the Government, raising its importance in terms of national security.

Additionally, Drahi’s stakebuilding has sparked speculation other potential buyers are eyeing up BT.

It also comes amid wider interest in the British telecoms sector from overseas investors, with Abu Dhabi-based telecoms group Etisalat revealing earlier this month that it had snapped up nearly 10 per cent of Vodafone for £3.6billion, making it the company’s largest shareholder.

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