French media conglomerate Vivendi has agreed to Altice’s €40/share offer to acquire another 20% stake in Numericable-SFR, moving ever closer to its strategic – but not financial – exit from telecoms.
Altice and Numericable-SFR will each buy a…
French media conglomerate Vivendi has agreed to Altice’s €40/share offer to acquire another 20% stake in Numericable-SFR, moving ever closer to its strategic – but not financial – exit from telecoms.
Altice and Numericable-SFR will each buy a 10% stake, for a total consideration of €3.9bn, meaning that Vivendi will have received €17bn from its two-step exit from French telecoms.
The value of this second deal represents an 18.9% discount on Numericable-SFR’s closing price at the time of Altice’s most recent offer last month, although Vivendi pointed out that it was a 20% premium over the closing price of the shares on 27 November, the date the original SFR sale closed. It also added that holding on to such a small stake would have made “a future exit under optimal conditions uncertain”.
Following the closure of this deal – due early May – and of GVT – due in Q2, Vivendi will have executed its strategy to exit its telecoms businesses in Morocco, France and Brazil. It will however retain stakes in Telecom Italia (5.7%) and GVT/Telefonica Brasil (7.7%), which both figure as part of Telefonica’s payment for GVT. A Vivendi spokesperson described these stakes as “opportunistic…financial, rather than strategic investments”.
The first tranche will be paid shortly, following the Numericable-SFR AGM to be held on April 30 at the latest, via a share buyback (to be agreed at the AGM) financed by cash and a revolving credit facility, which has been upsized from €750m to €1bn. The second tranche will paid via cash and a short-term loan yet to be agreed, by 30 April 2016 at the latest, a Numericable spokesperson confirmed.
The deal will also mean the end of the shareholders’ agreement, call options and earn-out initially agreed by Vivendi and Altice.
The swiftness of this agreement has fed into industry expectations that Altice owner Patrick Drahi will soon be back on the M&A warpath, also prompting predictions that Vivendi itself will itself be on the lookout for takeovers in the media and entertainment space.
Altice France’s stake in Numericable-SFR will rise from 60.4% to 70.4%, with the remainder listed on Euronext Paris.
