Bouygues SA (EN) extended its offer to acquire France’s second-largest phone carrier SFR, seeking to bring around owner Vivendi SA (VIV) whose negotiations with billionaire Patrick Drahi’s Altice SA (ATC) are set to end this week.
Bouygues also pledged a so-called break-up fee of 500 million euros ($689 million) should antitrust authorities reject its proposal to merge SFR with Bouygues Telecom. The extension of its proposal by two weeks to April 25 would give Vivendi “time to examine its offer in a calm and detailed manner,” the Paris-based construction-and-media conglomerate led by Martin Bouygues said today.
Vivendi last month picked Altice over Bouygues for exclusive talks to sell SFR, which will end April 4. Each bid is valued at more than $20 billion, with Bouygues having sweetened its offer twice. While Vivendi prefers Altice’s proposal because of a higher likelihood of antitrust approval and quicker exit from the enlarged entity, the French company would like Altice to narrow the gap with Bouygues’s offer, people familiar with the matter said last week.
Altice is discussing such a move, one of the people said last week, asking not to be identified because the deliberations are confidential. An representative for Altice, Drahi’s cable holding company, couldn’t immediately be reached for comment.
“Bouygues had to make this announcement to clarify that they keep on being available for Vivendi if they want to negotiate any further,” said Nuno Matias, an analyst a Banco Espirito Santo SA. “They want to remind everyone that they are committed to re-enter this discussion.”
Shares of Bouygues rose 1 percent to 30.58 euros at 11:02 a.m. in Paris and Vivendi climbed 0.7 percent to 20.36 euros. Altice fell 0.4 percent to 32.20 euros in Amsterdam, while its French cable unit Numericable Group (NUM) rose 1.5 percent to 28.95 euros in Paris.
Bouygues last month brought in a government-controlled fund and sweetened its cash offer to 13.15 billion euros, plus a 21.5 percent stake in the entity created from a merger of SFR with Bouygues Telecom. Drahi’s proposal includes 11.75 billion euros in cash and 32 percent of the enlarged company from combining Numericable with SFR.
“Bouygues’s improved cash offer is a factor of pressure on Numericable to also do it,” Matias said.
With a sale of SFR, Chairman Jean-Rene Fourtou is making good on a promise to split Vivendi and sell phone assets to focus on media. Vivendi is evaluating cash proceeds as well as criteria including regulatory risks, implications for jobs as well as liquidity of the stake in the enlarged SFR it will retain, people familiar with the matter have said.
If a transaction is completed, it could surpass Actavis Inc.’s agreement to buy Forest Laboratories Inc., making it the second-biggest acquisition announced this year, according to data compiled by Bloomberg. Comcast Corp.’s bid for competitor Time Warner Cable Inc. is the largest. An acquisition could also provide one of the biggest financing deals to loan bankers in Europe this year.
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