In the battle for the hand of French operator SFR, Bouygues has redoubled its efforts to attract Vivendi's attention away from rival Altice by extending both its original and its improved offer to April 25, and also presenting a break-up fee of €500 million ($689 million) should any eventual merger of Bouygues Telecom and SFR fail to complete for regulatory reasons.
In a brief announcement on Tuesday, the construction and telecoms group said it "wishes to allow Vivendi the time to examine its offer in a calm and detailed manner, and to proceed with all the necessary discussions that such an important operation requires."
On Wednesday, the company also confirmed that Vivendi could choose between its original offer made on March 12 of €11.3 billion and a 43 per cent share in the merged entity or its improved offer made on March 20 of €13.15 billion in cash and a 21.5 per cent stake in the merged entity. Bouygues said it was making the two offers available in response to the wishes of certain Vivendi shareholders.
The improved offer had been due to expire on April 8. However, Vivendi is in exclusive talks with Altice and Numericable until April 4, and this would have left little time for Vivendi to assess Bouygues' counter proposal in full.
Vivendi had reportedly promised Bouygues it would consider its revised offer. Indeed, according to reports last week by Le Figaro, a special sub-committee of Vivendi's board that previously evaluated the original two offers met again last Thursday to discuss the latest Bouygues bid.
Vivendi said on March 14 that it would grant Altice an exclusive three-week period for talks on SFR. The Altice/Numericable offer comprises an €11.75 billion payment to Vivendi and a 32 per cent share in the equity of the combined listed entity. Altice said €3.4 billion would be financed through a capital increase and €8.35 billion through debt.
Altice wants to create a fixed and mobile behemoth by merging Numericable with SFR. Bouygues is also desperate to get its hands on SFR's network assets, but Vivendi is concerned that a Bouygues Telecom/SFR merger would encounter too much regulatory resistance because it would reduce the number of mobile operators in France from four to three.
In an effort to underline its confidence that it will be able to obtain all the regulatory approvals, Bouygues therefore said it was committed to paying a break-up fee of €500 million "if the regulatory authorities were to refuse to approve the merger agreement or if Bouygues were to withdraw its request for approval on account of the conditions laid down by the regulators."
Earlier this week, Vivendi, Altice and Bouygues also came in for some criticism by French financial markets regulator AMF, which called on them to provide more transparency in their talks on SFR, and fully meet rules of disclosure.
- see this Bouygues statement
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