UPDATED: Report: Numericable plans €11B cash bid plus almost €4B in other assets for SFR

Numericable and its 40 per cent shareholder Altice are reportedly planning to submit a cash offer of around €11 billion ($15.2 billion) plus €3 billion in Numericable's cable assets and a €750 million capital increase by Altice for French operator SFR, as speculation continues to swirl about potential suitors for the Vivendi unit.

Citing unidentified sources, Bloomberg said Patrick Drahi, the founder of Altice, has guarantees from lenders for €8 billion of debt.

It has long been known that cable operator Numericable and Altice are interested in SFR in order to expand their presence on the competitive French market. Vivendi confirmed last week that Altice had approached it about a possible deal between Numericable and SFR, although the telecoms and media giant said it had not yet received a formal offer.

Bouygues Telecom also reportedly entered the race to buy SFR last week, hiring two investment banks to advise it on a possible tie-up.

Citing unidentified sources, Reuters said on Thursday that the French market's third mobile operator is now evaluating a bid for the Vivendi-owned company with the aid of HSBC and Rothschild.

That means three potential suitors are now targeting SFR, as Iliad is also believed to be discussing a potential offer.

As things stand, the money is on a deal between cable operator Numericable and SFR, because this deal would face less regulatory scrutiny than a merger between two major operators.

"To some degree, Iliad and Bouygues have to look at SFR again now, just as a matter of house-keeping and good management because Numericable is moving in on SFR," a banker told Reuters last week. "My prediction is that the SFR and Numericable deal is what gets done. The rest of it is just noise."

For its part, Vivendi has been seeking options for SFR for some time as part of its strategy to rid itself of its troublesome telecoms assets and focus on its media business. In November Vivendi's supervisory board agreed unanimously to the plan to demerge SFR from the group, but the company could still opt for an outright sale if the price is right. A decision could be made as soon as March.

Vivendi also recently entered into exclusive negotiations with Belgacom on the acquisition of 100 per cent of the Belgian incumbent's Telindus France unit, in order to strengthen SFR's unified communications services for enterprise users ahead of the company's spinoff.

For more:
- see this Bloomberg article
- see this Reuters article

Related News:
Report: Bouygues Telecom hires banks to probe SFR buy
Bouygues Telecom steps up competition amid M&A rumours
Vivendi moves on Telindus France to beef up SFR ahead of spinoff
Altice targets 'more than nine' acquisitions after raising €1.3B in IPO
SFR and Bouygues Telecom reach accord on network sharing

Article updated to reflect that the bid is expected to comprise €11 billion in cash plus €3 billion in debt and €750 million in a capital raising exercise by Altice.

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