Citing national security concerns, the UK government has launched an investigation into billionaire Sotheby’s owner Patrick Drahi over his growing investment in multinational British Telecommunications (BT).
Through his US-based telecommunications company, Altice, Drahi bought a 12.1% stake in BT in June, then increased his stake to 18% in December. The latest investment raised eyebrows within the UK Department for Business, Energy and Industrial Strategy, which feared Drahi was considering a takeover of the UK company.
The Business Secretary, Kwasi Kwarteng, will lead the “comprehensive national security assessmentwhich is being conducted under the National Security and Investment Act 2021. The recently passed law grants the government the power to intervene in commercial transactions around major assets in the name of national security.
Kwarteng and his team have 30 days to complete the review (although there is an option to extend this period to 45 days), which is now underway. BT plans to “cooperate fully” with the investigation, according to the art diary.
When contacted by Artnet News, representatives for the auction house declined to comment on the UK government’s investigation.
Drahi, a Franco-Israeli media magnate who acquired Sotheby’s for $3.7 billion in 2019privatizing the company in the process, is worth around $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 British government warned that it would intervene if it sensed a takeover was coming. “The government is committed to leveling the country through digital infrastructure and will not hesitate to act if necessary to protect our critical national telecommunications infrastructure,” said a the spokesperson said at the time.
Drahi explained that he had no intention of making a full offer for the $21.9 billion company, but was quick to qualify his statement, noting that circumstances could change. Under British law, he is prohibited from launching a takeover bid for six months from this declaration. This period expires next month.
The entrepreneur’s investments in BT drove the company’s share price higher last year, but on Thursday, when news of the investigation broke, prices fell 5%.
At the time of Drahi’s increased investment last year, rumors swirled that he was consulting with investment banks to turn Sotheby’s back into a publicly traded company.
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