Citing national security concerns, the UK government has launched an investigation into billionaire Sotheby’s owner Patrick Drahi over his growing investment in the multinational company British Telecommunications (BT).
Through his U.S.-based telecommunications company Altice, Drahi purchased a 12.1 percent stake in BT in June, then upped his sharehold to 18 percent in December. The latter investment raised eyebrows in the U.K.’s Department for Business, Energy, and Industrial Strategy, which feared Drahi was eying a takeover of the British company.
Business Secretary Kwasi Kwarteng will lead the “full national security assessment,” which is being conducted under the National Security and Investment Act of 2021. The recently-passed law grants the government power to intervene in business transactions around major assets in the name of national security.
Kwarteng and his team have 30 days to complete the review (though there is an option to extend that period of time to 45 days), which is now underway. BT plans to “fully cooperate” with the investigation, according to the Art Newspaper.
When reached by Artnet News, representatives from the auction house declined to comment on the U.K. government’s probe.
Drahi, a Franco-Israeli media tycoon who acquired Sotheby’s for $3.7 billion in 2019, taking the company private in the process, is worth an estimated $6.6 billion, according to Forbes. To date, he has invested $3.2 billion in BT.
In December, when Drahi increased his shares in the company, the U.K. government warned that it would step in if they sensed a takeover coming. “The government is committed to leveling up the country through digital infrastructure, and will not hesitate to act if required to protect our critical national telecoms infrastructure,” a spokesperson said at the time.
Drahi explained that he did not intend to make a full bid for the $21.9 billion company, but quickly qualified his statement, noting that circumstances could change. Under U.K. law, he is barred from launching a takeover play for six months from the time of that declaration. That period expires next month.
The entrepreneur’s investments in BT boosted the company’s share prices last year, but on Thursday, as news of the investigation went public, prices plummeted by five percent.
Around the time of Drahi’s increased investment last year, rumors swirled that he was consulting investment banks about turning Sotheby’s into a publicly-traded company once again.
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