Jerome Domine/Abaca
The U.K. said on Thursday that it will launch a national security probe into Sotheby’s owner Patrick Drahi stake in British Telecommunications (BT) telecom company, the largest company of its kind in the country.
Drahi maintains his stake in BT through his U.S.-based telecommunications company Altice, which he founded in 2001. In addition to serving as the head of that company and running Sotheby’s, Drahi is also a major collector, having placed on ARTnews’s Top 200 Collectors list for the past two years.
The British government previously stated that it is monitoring Drahi’s increased investment in the previously state-owned telecommunications monopoly, anticipating a potential takeover. Drahi has denied that this is his plan.
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Altice first acquired a 12.1 percent stake in BT last June, later increasing it by another 6 percent in December.
Kwasi Kwarteng, the U.K.’s business minister, announced the probe in a statement on Thursday. The agency has the authority through the 2021 National Security and Investment Act to investigate and potentially block transactions related to large-scale business deals by foreign investors on the grounds of safeguarding national security.
The government has 30 days to carry out the investigation. Representatives for BT said the company would comply with the inquiry.
The news comes several months after Drahi was reported to be mulling taking Sotheby’s public this year. In 2019, Drahi took the 277-year-old house private, and the move would return it to its prior market status.
Since acquiring Sotheby’s for $3.7 billion more than two years ago, Drahi has received major payouts from the deal. In May 2021, Sotheby’s paid out $300 million dividends to its owners. Drahi’s BidFair USA owns a 94 percent stake in Sotheby’s.
News of Sotheby’s potential public return coincided with reports that Drahi could be maneuvering to leverage debt from a leaseback transaction on a mortgage taken on Sotheby’s London headquarters earlier this year. The reports prompted speculation that the move could shore up funds that would allow Altice’s take over of BT.
