The UK government must examine the implications for national security of the 18% stake in French telecommunications group Altice in BT, weeks before the investment vehicle controlled by billionaire Patrick Drahi is free to bid acquisition of the precious national asset.
BT said on Thursday it had received notification that business secretary Kwasi Kwarteng was exercising his “convening power” under the new National Security and Investment Act to examine the December increase in the French company’s stake. .
Kwarteng will now have 30 working days to assess the detention for national security reasons, although it could be extended by 45 days if necessary.
Speculation about Drahi’s intentions for BT has been rampant since he spent £ 2bn on a 12 per cent stake last June, with many wondering if he planned to launch a leveraged takeover bid.
People close to the telecom group have long said that Drahi supports his long-term strategy, especially his rapid investment in the deployment of full fiber technology, and did not believe he was seeking full control.
The government’s decision to examine Altice’s involvement, which raises the possibility that he may seek appeals or reduce his involvement, indicates that a possible more aggressive move by the Franco-Israeli businessman would face political obstacles.
BT’s share price, which received a rise every time it emerged that Drahi had built or added to its stake last year, fell nearly 4 percent to 183 p. on Thursday morning.
In a statement, the UK government said it had “powers under the National Security and Investment Act 2021 to examine and, if necessary, intervene in qualified procurement for national security reasons”.
He added: “The business secretary has decided to request the acquisition of 6% of the shares by BT’s Altice for a full national security assessment.”
When he increased his stake, Altice said he had no intention of bidding for BT, meaning that under the acquisition code he could not make an unsolicited takeover bid for six months. This period will expire in mid-June.
“The timing seems to be related to Altice’s acquisition restrictions expiring in June, and that may be more a warning about acquiring more control than an objection to the 18% stake per se,” said James Barford , Enders Analysis analyst.
“BT is very sensitive in terms of national security: it works for a government that is not allowed to talk about, as well as being crucial to the resilience of the network. I would not expect the government to allow a takeover or total control over a foreign investor “.
In a statement, BT said it would “cooperate fully with this review”. Altice declined to comment.
The NSI Act, which came into force on January 4 this year, allows for greater control over foreign acquisitions of companies in sensitive industries.
It gives the secretary of state power to call for acquisitions “that the secretary of state reasonably suspects that they give rise to or may give rise to a risk to national security,” according to a business department (BEIS) document.
“The Secretary of State may then authorize the acquisition or, if necessary and proportionate, impose certain conditions, block it or deactivate it completely.”
This is the second such intervention by the Secretary of State that has been made public.
The first came on Wednesday evening when Kwarteng said he was examining the acquisition last year of Newport Wafer Fab in Wales by Nexperia, a Dutch subsidiary of Chinese company Wingtech.
Other acquisitions have been quietly called since January without any publicity, according to officials.
NSI legislation was first proposed by former Prime Minister Theresa May to expand the number and type of agreements that could be examined by the British government amid growing unease over hostile foreign powers to access the technology. of the United Kingdom.
Additional report by Leila Abboud