Ministers have warned the French billionaire Patrick Drahi that they will protect BT from any deal harmful to Britain’s national security, in a rare public intervention against an individual shareholder.
Minutes after Mr Drahi revealed he had increased his stake in BT from 12pc to 18pc, the Government said it was “monitoring the situation carefully” and would “not hesitate to act if required to protect our critical telecoms infrastructure”.
Mr Drahi, 58, who controls French telecoms group Altice and owns the auction house Sotheby's, shocked the market when he emerged as BT’s biggest shareholder in June and has now lifted his stake to 18pc – valued at more than £3bn.
Officials have been on alert following months of speculation that the businessman is preparing a takeover bid. His latest move prevents him from making a bid for BT for six months unless it is agreed by the company’s board of directors or is made in response to an offer from a rival suitor.
Mr Drahi remains free to increase his stake further, however, up to just shy of 30pc, stoking concern inside BT that he could short of a takeover his influence could amount to “creeping control”.
His manoeuvres have sparked concerns in Westminster given his record as an enthusiastic cost cutter and user of debt to fund his deal making. BT’s critical role in UK infrastructure and multibillion-pound pension deficit, which taxpayers would be liable to cover if the company hit trouble, have set up a test of the new National Security and Investment Act, which is due to come into force in January.
The Government has previously stepped in to ban Chinese tech giant Huawei from building the UK’s 5G networks, while ministers are reviewing Nvidia’s $40bn takeover of British chipmaker Arm.
However, the Government’s warning over BT marks a rare defensive intervention before an offer has even been tabled. Mr Drahi’s actions would likely be scrutinised under the recently-passed National Security and Investment Act, which comes into force in January.
Mark Dorff, a lawyer at Brown Rudnick, said a potential takeover of BT was “precisely the sort of transaction that the Government will have the power to stop” under the new laws.
He said: “It’s probably an easy one [to intervene in]… and in fact if they didn’t it would probably raise questions. If you’re not going to at least raise the flag that taking BT private might be an issue for national security, then where would you?”
Mr Dorff added that the new laws had retrospective powers, meaning ministers could potentially block future share purchases or even reverse Mr Drahi’s efforts to build up his stake.
While the official terms of the National Security and Investment Act state that the Government will only intervene when an investor’s shareholding rises to 25pc, BT insiders believe there is sufficient flexibility in the rules that Mr Drahi’s 18pc stake could qualify.
No apology necessary TRT.
“Strikingly, Altice is yet to ask for representation on BT's board, which, under normal circumstances, it would be entitled to request. That implies the relationship between Altice and BT's board, led by its Adam Crozier, the new chairman and Philip Jansen, the chief executive, remains cordial.”
“It has been reported that Altice topped up its shareholding in BT by buying shares in the open market rather than from Deutsche Telekom. It means that two shareholders - Altice and Deutsche Telekom - together now own 30.06% of BT.
Were they to pool that stake, they would be required to make an automatic offer to other shareholders.”
Combined bid might make a lot of sense, given the comms this morning from Drahi.
https://news.sky.com/story/why-whitehall-is-listening-in-carefully-as-bts-biggest-investor-builds-his-stake-12495550
Only a matter of time b4 Drahi courts DT for their shares, for the 30% threshold. He’s holding 3 aces and he’s looking for the other.
https://www.telegraph.co.uk/business/2021/12/14/french-billionaire-patrick-drahi-increases-stake-bt-takeover/
Patrick Drahi denies a takeover bid is imminent, despite his holding hitting 18pc.
Billionaire Patrick Drahi has increased his stake in BT, tightening his grip on the telecoms giant and fuelling further speculation of a takeover bid.
The French tycoon, who rattled BT by taking a 12.1pc stake in June, has now bought a further 585m shares, taking his stake to 18pc – worth more than £3bn.
It marks the first move by Mr Drahi since a six-month moratorium on further share purchases expired on Saturday.
The businessman, who controls telecoms group Altice, reiterated that he does not intend to make a takeover bid, though this is unlikely to dampen expectations of a move.
BT’s second-largest shareholder, Deutsche Telekom, holds a 12pc stake. If Mr Drahi were to buy this stake, he would hit the 30pc threshold at which a takeover offer must be tabled.
Deutsche Telekom chief executive Tim Hoettges has openly fuelled speculation since Mr Drahi first emerged as BT’s biggest investor, describing him as a “king maker” in any potential deals.
In a brief statement acknowledging the stake increase this morning, BT said it will “continue to operate the business in the interest of all shareholders and remains focussed on the successful execution of its strategy and building on recent performance momentum”.
Mr Drahi’s manoeuvres also sparked a swift response from the Government, which said it was “monitoring the situation carefully” and would “not hesitate to act if required to protect our critical telecoms infrastructure”.
Pressure has been mounting on ministers to do more to protect crucial British assets from foreign takeovers, and any bid for BT would be likely to be scrutinised under the recently-passed National Security and Investment Act, which comes into force in January.
The stake increase comes just two weeks after former ITV chief Adam Crozier took over as BT chairman.
The blue-chip telecoms group, which is grappling with a huge pension deficit and debt pile, has been bracing for a move for several years amid rising speculation it could face a break-up or takeover.
The company hired advisers at Robey Warshaw and Goldman Sachs to defend against any potential bids following Mr Drahi’s surprise entrance in June.
* impetus
With 18% of the share, I can’t see another player being able to buy-in to create a bidding war, so it’s another 6 month radio silence I’m afraid. Unless DT sells, the “King Maker” story from Tim has more impetuous now.
Even on a simple supply and demand argument, that should warrant a higher price. There’s 18% less shares in the market place for anybody else to purchase.
*I think you can reverse that statement, Dorries says to Phil, “tell me what you want me to say/do”.
“ Dorries, secretary of state for the Department for Digital, Culture, Media & Sport since September, will grill Jansen on Drahi’s intentions this week.”
I think you can reverse thar statement, Dorries says to Phil, “tell me what you want me to say/do”.
BT chief in summit with ministers over threat of takeover by French raider.
Digital secretary Nadine Dorries has called in BT boss Philip Jansen for talks just as its largest shareholder, Patrick Drahi, is free to swoop on the former telecoms monopoly.
Ministers are on alert about the prospect of a full takeover of the FTSE 100 company by the French-Israeli billionaire.
Dorries, secretary of state for the Department for Digital, Culture, Media & Sport since September, will grill Jansen on Drahi’s intentions this week.
Altice, the telecoms tycoon’s company, stunned the City by buying a 12.1 per cent stake in BT in June to become its biggest shareholder.
Under Takeover Panel rules, Drahi was restricted from buying more shares or making a full swoop for the company until this weekend.
Speculation is mounting about his next move…………..
Who’s happy collecting divs, progressing to 15p in 4-5 years time, and a share price to £4 in the same time scale, I’ll have some of that. I just hope Drahi owning a chunk of BT, can oil the wheels of the city machine waking up to what BT is truly worth, now and the future.
“He frequently axes about a third of the workforce at companies he targets, strangling salaries and cutting costs to the quick. (French unions dub him the “cost killer”).”
That’s a bullet point and a half!
Given, we’re stuck with this self absorbed lot for another 3 years or so, the sooner BoJo joins the back benches the better, and replaced by Rishi, who seems to have some moral stock.
Rod, give us the nod,
That you’re not a total sod,
That you’re quite the bod,
And not a fraud,
And we’ll all applaud.
Sorry for your loss, Bkkbkk.
Telecoms have been the great facilitator in this pandemic, as were the supermarkets and any company that could sell anything that could be delivered plus the delivery companies themselves and steaming companies. Only one took a kicking this past 18 months, plus the supermarkets not getting a fair crack of the whip.
The days of protecting cherry pickers are over. This is a National job, step up or ship out.
Rock & Kel, I believe DT have placed the BT holding in their pension scheme. So probably happy to hold until they get what they believe it’s worth.