The French billionaire targeting BT for a potential takeover has mortgaged the historic London home of Sotheby’s and borrowed heavily against the proceeds via an international chain of companies ending in Luxembourg.

The telecoms entrepreneur Patrick Drahi acquired the fine art auction house in a £2.8bn debt-fuelled buyout in 2019.

Recently published accounts for the UK arm of Sotheby’s and related companies show that within weeks of gaining control Mr Drahi established a new company to complete a sale-and-leaseback transaction.

In late 2020 it bought the Sotheby’s building on New Bond Street in Mayfair for nearly £230m from its parent company. Most of the price was settled in cash from a £150m mortgage against the property. The auction house moved into the premises at the centre of the London art world in 1917.

After the sale, Sotheby’s immediately passed a £100m dividend up a chain of companies to another new entity, Sotheby’s Holdings UK. Its parent company, Bidfair, subsequently borrowed $450m (£336m) from the French bank BNP Paribas, secured against its shares in Sotheby’s Holdings UK.

The fate of the loan has not yet been disclosed as Bidfair has not published accounts. It is ultimately controlled by Mr Drahi via a company in Luxembourg.

Sale and leaseback transactions are a common way of releasing capital from properties. However they have been attacked as “asset stripping” that can weaken companies, particularly if the proceeds are extracted.

Regardless, the financial engineering at Sotheby’s offers a glimpse of some of the techniques Mr Drahi has used to build up his fortune and his telecoms empire Altice. He has been lauded and criticised as a master of high-wire finance and the restructuring required when the debts prove too much. His tax avoidance structures have also drawn fire in France.

The 58-year-old’s dealings are under closer scrutiny in the UK following his stealthy acquisition of 12pc of BT. The move earlier this year was widely viewed in the City as a beachhead to seize control or force a radical shake-up of Britain’s former state monopoly.

A lock-up preventing him bidding for BT ends next month. Its crucial role in national security has inevitably sparked an unusually high level of interest in Mr Drahi as a potential acquirer of a British company in Whitehall.

A spokesman for Mr Drahi did not comment.