Billionaire Patrick Drahi has raised his investment in BT amid growing speculation that the telecoms giant could face a takeover bid.
The Israeli-French businessman took his stake from 12% to 18%, prompting an immediate government response that it would intervene if necessary.
His company, Altice, said it had no plans to make a full bid, but that could change if circumstances do.
Mr Drahi stake-building in BT sparked rumours about other possible bidders.
The businessman, who also owns auction house Sotheby’s, first began buying BT shares in June.
Altice said in a statement: “Over recent months we have engaged constructively with the board and management of BT and look forward to continuing that dialogue.
“We continue to hold them in high regard and remain fully supportive of their strategy, principally to play the pivotal role in delivering the expansion of access to a full fibre broadband network – an investment programme which is so important to both BT and to the UK.”
However, his move prompted the government to warn it could intervene if required, with ministers concerned that any pressure on BT to cut costs could affect the ongoing broadband rollout.
A spokesman said: “The government notes the latest acquisition of BT shares by Altice. We are monitoring the situation carefully.
“The government is committed to levelling up the country through digital infrastructure, and will not hesitate to act if required to protect our critical national telecoms infrastructure.”
BT said it noted the purchase, adding that it would “continue to operate the business in the interest of all shareholders and remains focused on the successful execution of its strategy and building on recent performance momentum”.
Altice said “it does not intend to make an offer for BT”.
Under British takeover rules, that bars Mr Drahi from making such a move for six months.
Mr Drahi announced in June that he had bought a 12.1% stake in BT, worth £2.2bn at the time.
After the Brexit referendum, the pound slumped against the dollar and the euro, and it is still below 2016 levels.
This gives foreign firms interested in getting hold of UK firms more buying power than prior to Brexit.
Due to low interest rates, debt is very cheap, and before Omicron concerns surfaced, investors were also cheered by a global economic recovery from the Covid pandemic.
In the first seven months of 2021, UK takeovers hit a 14-year high.
The 175-year-old BT is in the middle of a transformational programme to build a national broadband fibre network, a strategy crucial both to the company and the government, which says it wants to boost regional growth.
Online shopping and home working using the internet have increased in importance due to the pandemic, all of which make BT a tempting takeover target.
While British governments have in the past welcomed foreign investment and takeovers, any full bid for BT would put ministers in a difficult position due to the company’s role in protecting national security.
Any bidder for BT would also have to face competition scrutiny.(BBC)
*PHOTO: Patrick Drahi
