Vivendi is reportedly still considering a sale of its SFR telecoms unit to French cable provider Numericable in a move that would create a group with more broadband subscribers than Iliad in addition to SFR's existing 21.2 million mobile subscribers, Bloomberg reported.
The French media group 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.
According to Bloomberg, Vivendi and Numericable have held talks on and off in the past year without being able to agree on a valuation. However, Numericable's biggest investor Altice is pursuing an expansion strategy that includes its operations in France, and recently cited SFR as a potential target. Quoting unidentified sources, Bloomberg said no formal offer has yet been made for SFR, and a spinoff or listing is still on the agenda for the French operator.
SFR is currently valued at €12 billion, Ian Whittaker, an analyst at Liberum Capital, told Bloomberg. A combination of SFR's 5.2 million broadband subscribers with Numericable's 1.7 million would exceed Iliad SA's 5.6 million broadband users, Bloomberg added.
Altice said in early January that it plans to raise around €750 million ($1 billion) through a listing of its shares on NYSE Euronext in Amsterdam to give it more flexibility for future acquisitions. When he announced details of the IPO, Altice CEO Dexter Goei told reporters that Altice is open to acquisition opportunities in all of its markets and would focus on consolidating its existing assets. He added that SFR or Bouygues Telecom are possible targets in France, while Altice is interested in mobile operators in Belgium and cable operators in Luxembourg.
Altice has now set a price range of €24.75 to €31.25 per share for its IPO, offering to sell 20 to 25 per cent of the business depending on demand, Reuters reported. Reuters added that the IPO is valued at €1.5 billion ($2.03 billion) assuming full exercise of an over-allotment option, and will be marketed from Monday to Jan. 30.
Founded by entrepreneur Patrick Drahi, Altice has gradually built up its operations through a series of acquisitions over the past decade, the latest being in the Dominican Republic, including Orange Dominicana for $1.435 billion (€1.06 billion) and cable operator Tricom.
Now, the company has ambitions for further growth on a global scale, with a clear focus on cable as well as mobile operations.
In Europe, Altice owns a 40 per cent stake in Numericable and also operates a number of operating units under its Altice VII holding. Altice VII groups together the company's fixed and mobile activities in Belgium, Luxembourg, Portugal, Israel, French Overseas Territories and the Dominican Republic, while also offering B2B services in Switzerland.
The company runs HOT Cable and HOT Mobile in Israel; offers TV, fixed-line and broadband services in Belgium and Luxembourg under the Numericable brand; sells mobile services in Belgium under Coditel, an MVNO operator on the Mobistar network; sells fixed-line, TV and broadband services under the Cabovisão brand in Portugal; sells fixed-line, TV and broadband services under the Numericable brand in French Overseas Territories, Guadeloupe and Martinique; and operates Orange Dominicana and Tricom in the Dominican Republic.
Like many operators in Europe, the company is interested in a strategy that would allow it to bundle cable TV, broadband and voice services with mobile services, as illustrated by its recent move in the Dominican Republic. So far it is focusing on small markets where it can build a brand and develop service strategies.
In the nine months to the end of September, Altice's adjusted earnings before interest, tax, and depreciation were €1.02 billion. Revenues increased by 1.1 per cent to €2.4 billion, with France providing 45 per cent of sales and Israel 27 per cent.
For more:
- see this Bloomberg article
- see this Reuters article
Related Articles:
Altice seeks €750M through IPO to fuel growth ambitions
Vivendi board gives nod to SFR demerger
Vivendi targets mid-2014 for SFR split
SFR shows some glimmers of hope as turnaround continues