BT shares tumble 5% as Government probe into French billionaire Patrick Drahi’s growing stake in the telecoms giant is revealed
- Secretary of Kwasi Kwarteng is investigating on national security concerns
- Telecoms billionaire Drahi boosted his stake from 12.1% to 18% in December
The UK Government is investigating billionaire entrepreneur Patrick Drahi’s growing stake in telecoms giant BT on national security concerns.
Drahi’s Altice UK last year boosted its shareholding in BT from 12.1 per cent to 18 per cent, leading to concerns about the Franco-Israeli’s influence over a vital British company.
The telecoms firm informed the market of the investigation on Thursday morning, sending BT Group shares more than 5 per cent lower in early trading.
Patrick Drahi’s BT stake grew to 18 per cent in December, via his company Altice UK
It said: ‘BT Group has received notification from the Secretary of State for Business, Energy and Industrial Strategy that he has considered the increase by Altice UK of its shareholding…and is exercising his call-in power under section 1 of the National Security and Investment Act 2021.
‘BT Group will fully cooperate with this review.’
Drahi initially bought 12.1 per cent of BT in June 2021, before bumping that up to 18 per cent in December.
While Drahi, who is estimated to be worth roughly £9billion, claimed he had no plans to take BT private as he hoovered up more shares, his investment rang alarm bells for Government ministers.
At the time, a Government spokesperson said Britain ‘will not hesitate to act if required to protect our critical national telecoms infrastructure.’
Under the National Security and Investment Act 2021, Secretary of State for Business, Energy and Industrial Strategy Kwasi Kwarteng has the power to either approve Drahi’s investment outright, impose certain conditions on it, or block it outright.
The Bill also allows the Government to halt a single investor from owning more than 25 per cent in a business deemed to be of national significance.
Drahi, who also owns auction house Sotheby’s, is known for ruthless cost-cutting.
However, he has also invested heavily into fibre in his businesses in Portugal, France, Israel and the US after a series of debt-fuelled deals.
Among potential national security concerns for the Government are BT’s roll in maintaining phone cables and exchanges across the UK, as well as the Openreach broadband network.
Openreach is BT’s infrastructure arm that manages phone and internet lines for 28m homes.