The UK government is to deploy new “call in” laws to investigate the national security risks from the French telecoms group Altice’s 18 percent holding in BT.
The probe—ordered by Business Secretary Kwasi Kwarteng—comes just weeks before the investment vehicle controlled by French billionaire Patrick Drahi, 58, is allowed to make a takeover bid for the prized national asset.
“The business secretary has decided to call in the acquisition of shares by Altice of BT for a full national security assessment,” the government said in a short statement.
Altice is BT’s biggest shareholder and increased its stake last December from 12.1 percent to 18 percent in what many analysts believe to be manoeuvre ahead of a full purchase coup for the French company.
Under the new National Security and Investment Act, Kwarteng has the power to the green light the investment, impose certain conditions, or block it outright.
He can also use the new law to stop a single investor from owning more than 25 percent in a business deemed to be of national significance.
BT, formerly British Telecom, maintains the telephone cables and exchanges connecting nearly all UK homes and businesses to the broadband and telephone network through its Openreach operation.
BT’s Chief Executive Philip Jansen is overseeing a strategic investment plan aligned with government policy, and which will see £15 billion ($19 billion) spent on expanding BT Openreach’s full-fibre broadband infrastructure network in the UK.
In a brief statement, Kwarteng’s business department said it had 30 working days to assess the shareholding on national security grounds, and this can be extended by 45 days if required.
After increasing his shareholding last year, Drahi was, under Takeover Panel rules, barred from bidding for BT for six months without the agreement of the telecoms group’s board or a third party announcing an offer.
At the time the government said it would “not hesitate to act” to protect Britain’s critical national infrastructure.
A French-Israeli said to be worth £9 billion ($11 billion) with his fortune made in the telecoms sector, Drahi’s takeover bid ban expires in mid-June.
The BT brand was introduced in 1980 and became independent of the nationalised Post Office in 1981.
BT was a flagship sell off in 1984 under then Conservative Prime Minister Margaret Thatcher’s privation of state assets policy, becoming British Telecommunications plc with some 50 percent of its shares sold to investors.
The UK’s national security act came into force on Jan. 4 last year and grants the government greater power to scrutinise foreign takeovers of companies in sensitive industries.
