Vivendi Free to Choose Its Preferred SFR Bid, CDC’s Jouyet Says

Vivendi SA (VIV)’s board is free to choose a buyer for its SFR phone unit even as state-owned Caisse des Depots et Consignations backs one of the two bidders, CDC Chief Executive Officer Jean-Pierre Jouyet said.

“Vivendi’s board is autonomous and we will respect its decision,” Jouyet said at a press meeting in Paris today.

Bouygues SA (EN), the owner of SFR rival Bouygues Telecom, and Altice SA, the owner of cable operator Numericable Group (NUM), have put in bids for SFR, France’s second-largest phone company. Vivendi on March 14 picked Altice over Bouygues for exclusive talks that end tomorrow. On March 20, Bouygues came back with a sweetened offer that included an investment by CDC.

“We are investors in the telecommunications industry,” Jouyet said. “We are an important investor in this infrastructure. We are stakeholders in Orange, Vivendi and Bouygues. It seems normal that the Caisse des Depots would be a stakeholder” in SFR.

French Industry Minister Arnaud Montebourg has said he favors the reduction of the number of mobile-phone operators in France to three from four to end price wars, make the telecommunication sector viable and enable companies to invest in their networks. Unlike Altice, the offer from Bouygues -- which plans to fold SFR into its own mobile-phone unit -- would immediately reduce the number of operators to three from four.

Jouyet today said he favors having three operators in France, saying he has nothing against the Altice bid.

“We’re on good terms with Numericable, we’ve even sold them a unit a few years ago but we’ve made the fairest choices for us,” he said.

New Bid

Bouygues’s new offer has the support of Paris-based CDC as well as the Pinault family, which controls luxury group Kering, and JCDecaux Holding.

The Paris-based construction-to-media conglomerate led by Martin Bouygues would own 67 percent of the entity created by combining Bouygues Telecom and SFR. CDC would invest 300 million euros ($411 million) in cash and would hold a stake of about 3 percent, an unidentified official at the state-owned bank said March 20.

Bouygues asked for CDC’s backing, Franck Silvent, who oversees the bank’s finance, strategy and holdings, said today.

Vivendi is attempting to re-focus on content and media assets as sales slow and prices decline in France’s telecommunications market, one of Europe’s most competitive.

“In Europe we’re going to see a restructuring of the telecommunications industry,” Jouyet said. “There are more than 80 operators in Europe, four in the U.S. and two or three in China. Try and see what’s wrong.”

To contact the reporter on this story: Fabio Benedetti-Valentini in Paris at fabiobv@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net Vidya Root, Kenneth Wong

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