The UK government is to consider the national security implications of French telecoms group Altice’s 18% stake in BT, a move that comes weeks before takeover restrictions expire.
BT said on Thursday it had received notification that Business Secretary Kwasi Kwarteng was exercising his ‘power of appeal’ under the new National Security and Investment Law to review the December increase in stake of French society.
Kwarteng will now have 30 working days to assess detention for national security reasons, although this can be extended by 45 days if necessary.
Altice, controlled by billionaire Patrick Drahi, announced in December that it was increasing its stake in BT from 12% to 18%, worth more than £3bn.
In a statement, the UK government said it “has the power under the National Security and Investment Act 2021 to review and – if necessary – intervene in acquisitions qualifying for reasons of national security”.
He added: “The Business Secretary has decided to appeal Altice’s 6% share acquisition of BT for a full national security assessment.”
When it increased its stake, Altice said it had no intention of making a bid for BT, meaning under the takeover bid code it could not make a bid. six-month unsolicited buyout offer. This period will expire in mid-June.
“The timing appears tied to the expiration of Altice’s takeover restrictions in June, and this may be more of a warning about acquiring additional control than an objection to the 18% stake per se.” , said James Barford, analyst at Enders Analysis.
“BT is very sensitive in terms of national security – it works for a government it is not allowed to talk about, as well as being crucial for network resilience. I would not expect the government to allow a takeover or complete control to be transferred to a foreign investor.
In a statement, BT said it would “cooperate fully with this review”. Its shares fell 5% on Thursday.
Altice did not immediately respond to a request for comment.
The NSI Act, which came into force on January 4 this year, allows for greater scrutiny of foreign takeovers of companies in sensitive sectors.
It gives the secretary of state the power to call for acquisitions “that the secretary of state reasonably suspects poses or may pose a risk to national security,” according to a document from the business department (BEIS).
“The Secretary of State may then authorize the acquisition or, if necessary and proportionate, impose certain conditions, block it or completely unwind it.”
This is the second such intervention by the Secretary of State that has been made public.
The first came on Wednesday night when Kwarteng said he was reviewing last year’s takeover of Newport Wafer Fab, Wales, by Nexperia, a Dutch subsidiary of Chinese company Wingtech.
Other takeovers have been quietly called since January without any publicity, officials said.
The NSI legislation was first proposed by former Prime Minister Theresa May to expand the number and type of deals that can be scrutinized by the UK government, amid growing unease over access by foreign powers hostile to British technology.