{"id":31173,"date":"2022-05-26T12:00:55","date_gmt":"2022-05-26T11:00:55","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=31173"},"modified":"2022-05-26T12:19:06","modified_gmt":"2022-05-26T11:19:06","slug":"government-review-altice-uk-stake-in-bt-over-security-concerns","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2022\/05\/government-review-altice-uk-stake-in-bt-over-security-concerns.html","title":{"rendered":"Government Review Altice UK Stake in BT Over Security Concerns"},"content":{"rendered":"

Last year’s decision by Patrick Drahi’s Altice UK, which increased its stake in UK broadband and telecoms giant BT<\/a> from 12.1% to 18% (here<\/a>), has today been “called-in for a full national security assessment<\/em>” by the Government’s Department for Business, Energy & Industrial Strategy.<\/p>\n

Last year BT<\/a> was widely reported to have hired the same advisory firm that employs the former UK chancellor (George Osborne), Robey Warshaw LLP<\/strong>, to work alongside Goldman Sachs and strengthen its defence against a potential takeover. The operator\u2019s board are also understood to have been sensibly planning for different scenarios, such as a formal takeover offer or a demand for BT<\/a> to spin off its consumer (BT, Plusnet<\/a> and EE<\/a>) or network access division (Openreach<\/a>).<\/p>\n

In the past, potential suitors have often ended up being discouraged by various concerns, such as over the operator’s complex regulatory position, uncertainties around the outcome of Brexit, challenges due to their massive debt and pension liabilities, as well as various other issues. But with Brexit and the pandemic largely out of the way, and Ofcom<\/a> having given a green like for Openreach<\/a>’s \u00a315bn FTTP<\/a> build, there are now fewer obstacles.<\/p>\n

However, any group making a play for the UK telecoms giant would still need the Government on their side, which could be a challenge because they’re currently minded to protect key players in the British technology sector. This point has just been underlined by today’s security review, which will scrutinise Altice UK’s ever-increasing stake – despite the fact that they’ve not yet made an official takeover bid.<\/p>\n

Government Statement<\/strong><\/p>\n

The acquisition by Altice of 6% of shares in BT has been called-in for a full national security assessment by Business Secretary Kwasi Kwarteng today (Thursday 26 May).<\/p>\n

The government has powers under the National Security and Investment Act 2021 to scrutinise and \u2013 if necessary \u2013 intervene in qualifying acquisitions on national security grounds.<\/p>\n

The government has 30 working days (extendable by up to a further 45 working days) to carry out that assessment. That process is underway.<\/p><\/blockquote>\n

BT Statement<\/strong><\/p>\n

BT Group plc (\u201cBT Group\u201d) has received notification from the Secretary of State for Business, Energy and Industrial Strategy that he has considered the increase by Altice UK of its shareholding in BT Group from 12.1% to 18% and is exercising his call-in power under section 1 of the National Security and Investment Act 2021. BT Group will fully cooperate with this review.<\/p><\/blockquote>\n

Last year we noted that Deutsche Telekom<\/strong> (DT), which has long been linked with speculation of a takeover attempt and also holds a 12% stake in BT, added further fuel to the fire by alluding to the possibility of a deal with others for BT (here<\/a>). DT\u2019s boss, Tim Hoettges<\/strong>, said: “In the next 12 months something is going to happen there around [our 12% stake in BT] \u2026 We are entertaining all options. We have a lot of optionalities now on the table in the BT business. We will do something which is a good deal<\/em>.”<\/p>\n

At this point, we can’t tell whether the Government are being overcautious, or whether they do indeed expect something to happen. Either way, they seem to be reviewing a stock trade on the public market that, by itself, doesn’t yet raise any red flags.<\/p>\n

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