UK Government Hints it Would Block Bharti Boss Taking Control of BT

Officials within the UK Government have reportedly sent their strongest signal yet that they’d oppose any move by the boss of the India-based Bharti group, Sunil Bharti Mittal, to take control of UK broadband and telecoms giant BT by increasing his stake above the current level of 24.95%.

In case anybody has forgotten. Back in 2024 Bharti Global (via Bharti Televentures UK Ltd), the Indian multinational conglomerate, agreed to acquire French billionaire Patrick Drahi’s (Altice UK) stake of 24.5% (issued share capital) – worth around £3.6bn at the time – in the BT Group (here). But BT’s market cap has risen significantly since then (it’s now about £21.75bn) and Mittal’s stake has risen slightly to 24.95%, thus this stake is now worth more than £5bn.

However, such developments often have a habit of triggering talk about takeovers. On that front, BT itself could be said to have overcome some of the obstacles and uncertainties that often-discouraged potential bidders in the past, although there are still plenty of hurdles for a suitor to consider (e.g. the competitive UK full fibre market, high levels of debt, high interest rates, political opposition and so forth).

Doing anything serious on this front would also require a green light from the UK Government, which would conduct a review under the National Security and Investment Act 2021 when or if Bharti’s stake goes beyond the 25% mark. The government can launch such a probe before the 25% mark is reached, as they did with Altice UK in 2022, but is unlikely to create any new obstacles (here).

The Relationship Agreement that Bharti has with BT also contains a customary standstill restriction, together with customary exceptions, which limits Mittal’s ability to make a hostile takeover, as the board would presumably need to agree it first. Nevertheless, a new report in the FT (paywall) highlights how officials in the government have confirmed that they’d also be likely to reject any attempt by Mittal to take control of BT.

The current Government see the BT Group as being part of Critical National Infrastructure (CNI) and thus an area where they’d seek to maintain sovereign control, which is similar to the stance taken by the previous administration.

A Government source said (unofficially):

“It’s not to do with Bharti or India specifically, it’s a matter of keeping critical national infrastructure in sovereign UK control for obvious reasons. It’s important the market knows this isn’t personal, but resilience and sovereign capability have a different threshold in today’s world than for generations.”

The government thus appears to be making their position clearer to valued overseas investors, to avoid those investors suffering any possible embarrassment by making a move that would clearly not be supported. Both BT and Mittal declined to comment.