French telecommunications stocks added more than $15 billion in market value after Patrick Drahi offered to buy Bouygues SA’s wireless carrier in a deal that would reduce the number of competitors in the country.
Numericable-SFR, the company making the bid, jumped 14 percent at 1:39 p.m. Paris. Bouygues also added 14 percent, as rival Iliad SA rose 12 percent and Orange SA 7.1 percent. Billionaire Drahi’s holding company Altice SA gained 18 percent in Amsterdam.
Drahi’s proposal, said to be valued at about 10 billion euros ($11.4 billion), would reduce the number of national network providers to three from four in a market where earnings have suffered from years of price wars. A combination of Numericable-SFR and Bouygues Telecom would create a company with more than 30 million wireless subscribers, potentially overtaking Orange to become the market leader by mobile customer numbers.
“When you remove a player from the market, life is better for everyone,” Stephane Beyazian, an analyst at Raymond James, said by phone. “It creates value for everybody in the market because it’s easier to attract customers, potentially there’s less churns, potentially there are lower investments and lower prices.”
Bouygues called the offer unsolicited and said no negotiations are under way. Its board will meet Tuesday to evaluate the proposal. Economy Minister Emmanuel Macron said the timing “isn’t right” for further consolidation in the French phone market.