Business minister Kwasi Kwarteng said on Thursday he was exercising his \"call-in power\" under the National Security and Investment Act 2021 (NSI) after Drahi<\/a>'s Altice UK raised its shareholding.
The Franco-Israeli entrepreneur bought 12.1% of BT in June last year and raised that to 18% in December, but said he did not intend to make a full bid.
It triggered a blunt response from Britain at the time, which warned it would intervene if necessary to protect the telecoms group building the country's critical fibre network.
BT Group said it would fully cooperate with the government probe. Altice UK declined to comment.
Shares in BT were down 4.4% at 0937 GMT.
The NSI legislation came into force earlier this year, giving the government powers to scrutinise and, if necessary, intervene in acquisitions on national security grounds.
The BT move is the second time this week the government has exercised the powers.
On Wednesday, the acquisition of Britain's biggest microchip factory Newport Wafer Fab by Chinese-owned technology company Nexperia was called in for a full national security assessment.
Kwarteng now has 30 working days to carry out his assessment of Drahi's BT stake.
Jefferies analysts said they expected BT and Altice UK would have to provide large amounts of documentation to the government.
\"It seems reasonable to conclude that the government thinks Altice\/BT raises relevant national security issues,\" they said.
They noted the market was not counting on an Altice UK takeover to support BT's share price at current levels.
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