As Vivendi board meets today to decide whether holding Altice would be the best partner for its unit SFR, rival bidder Bouygues has for the third time sweetened its offer for the French mobile operator to €15bn (US$20.6bn).
In the three weeks of…
As Vivendi board meets today to decide whether holding Altice would be the best partner for its unit SFR, rival bidder Bouygues has for the third time sweetened its offer for the French mobile operator to €15bn (US$20.6bn).
In the three weeks of exclusive talks between Vivendi and Altice about plans to merge SFR and cableco Numericable, Bouygues has repeatedly improved its offer and proposed remedies to alleviate financial and regulatory concerns SFR’s parent may have.
Under Bouygues latest’s bid, Vivendi would receive €15bn in cash, which is €1.85bn more than the 20 March offer, and a 10% equity interest in the entity combining mobile players Bouygues Telecom and SFR, as opposed to 21.5% previously. Financing for the deal has been fully secured, it said.
The owner of Bouygues Tel is also offering an earn-out clause of €500m that could lift the total value of SFR to €16.5bn pre-synergies from €16bn.
Bouygues has been seeking to decrease as much as possible the stake Vivendi would have in the merged entity, aware that the French conglomerate is looking to exit SFR quickly to focus on its media operations instead.
To do so, Bouygues has invited several industrial and financial institutions to invest €2.85bn in the project, enabling it to boost its cash offer. These investors include AXA, state-owned financial institution Caisse des Depots et Consignations, the Dassault family, outdoor advertiser JC Decaux Holding, Singapore’s sovereign wealth fund, Ontario Teachers’ Pension Plan Board, the Pinault family and Reuben Brothers.
These institutions would together own 39% of Bouygues Tel-SFR while Vivendi would have a 51% interest. An IPO of the new entity is planned as soon as the merger closes, the industrial and media group said.
Bouygues has already agreed to sell its mobile network to latest entrant Free Mobile for €1.8bn in the hope to ease regulatory approval. But it has also added a €500m break-up fee, payable if French competition authorities block the deal.
Although Altice’s latest disclosed offer stood at €11.75bn in cash and a 32% stake in the resulting merger of Numericable with SFR, reports today suggest that Vivendi may decide to opt for the Altice option on execution and regulatory grounds.
The regulatory review of a merger between SFR and Bouygues Tel is expected to be more complicated than a transaction with Altice, given the significant antitrust implications of a horizontal deal which would bring the number of mobile operators in the market from four to three, compared to a combination with cableco Numericable, which is a less direct competitor.
