Vivendi continues Altice talks as Bouygues adds €1.85B to SFR bid

Vivendi stressed it is still in exclusive talks with Numericable shareholder Altice over the sale of its French telecoms business SFR, despite Bouygues stepping up its efforts to acquire the operator by raising the cash part of its offer by €1.85 billion ($2.55 billion).

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Martin Bouygues

On Thursday, Bouygues said its improved cash offer of €13.15 billion is now €1.4 billion more than the rival bid, while Vivendi's stake in the merged entity combining Bouygues Telecom and SFR would be 21.5 per cent instead of 43 per cent. Bouygues would hold a 67 per cent stake.

"At its supervisory board meeting of 14 March 2014, Vivendi confirmed the relevance of Bouygues' offer but considered the cash part to be insufficient," the construction and telecoms group said.

Bouygues added that its offer brings support from "major long-term industrial and financial shareholders into its Bouygues Telecom-SFR project". These include Bouygues Group shareholder Caisse des Dépôts et Consignations (CDC), the Pinault family and JCDecaux Holding. The group also reiterated commitments to stimulate investment and create long-term employment.

Vivendi did not comment on the higher cash offer from Bouygues, other than to confirm it has received the bid. "It should be kept in mind that the Vivendi supervisory board decided on March 14th to enter into exclusive negotiations with Altice for a period of three weeks," the company added.

The Altice/Numericable offer comprises an €11.75 billion ($16.3 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.

This latest salvo from Bouygues only serves to confirm what is at stake for the company: as France's third mobile operator Bouygues Telecom was hard hit by the increased competition inflicted after Free Mobile entered the sector in 2012. The company needs to boost its mobile and fixed assets, and a merger between Numericable and SFR would present another formidable rival, along with Orange France.

Bouygues had already agreed to sell its mobile network to Iliad should its merger with SFR go through, and speculation is rife that the company's telecoms unit will end up merging with Iliad whatever the outcome of the SFR sale.

The inclusion of state-owned CDC might raise eyebrows: some will already see Industry Minister Arnaud Montebourg's support for the Bouygues bid as too much state interference.

For more:
- see this Bouygues statement
- see this Vivendi statement

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