Vivendi Is Said to Explore Sale of SFR to Numericable Owner
Vivendi SA (VIV), preparing a spinoff of its French phone business SFR, is also weighing a possible sale of the unit to cable provider Numericable Group SA (NUM) and its biggest investor Altice, people familiar with the matter said.
While Vivendi and Numericable have held talks on and off in the past year without being able to agree on valuation, Altice, founded and chaired by Patrick Drahi, is making a renewed push to consolidate telecommunications assets in Europe, said the people, asking not to be identified because the deliberations are private. No formal offer has been made and the main scenario remains a spinoff and listing for SFR, they said.
A straight sale of SFR, France’s second-largest wireless carrier with 2012 revenue of 11.3 billion euros ($15.3 billion), would speed up Vivendi’s reorganization around media, music and broadcasting assets. Vivendi, which will ask shareholders in June to approve a split of the Paris-based company into two, is aiming to file details of SFR’s spinoff plan to market regulators by March, the people said.
“A positive for the Vivendi restructuring story,” Ian Whittaker, an analyst at Liberum Capital Ltd, said in a note. “This will raise hope that Vivendi will be rid of SFR.”
Representatives for Vivendi, Numericable and Altice declined to comment on a possible linkup of the communications groups.
Vivendi declined 0.3 percent to 19.51 euros in Paris. Numericable was down 0.2 percent to 28.70 euros.
Numericable held its initial public offering in Paris in November, and Altice is working on its own IPO. Altice has said it’s looking at companies that can bolster its positions or help it expand into new regions. Numericable has jumped about 16 percent since the IPO, for a market value of 3.6 billion euros.
Vivendi’s supervisory board in November approved the planned separation of SFR, naming Arnaud de Puyfontaine from Hearst Magazines International to lead the remaining media assets -- Canal+, Universal Music Group and Brazilian broadband provider GVT.
As part of the strategy review leading up to the split, Vivendi has sold stakes in video-game developer Activision Blizzard Inc. and Maroc Telecom SA for about $14 billion.
SFR is valued at 12 billion euros, according to Liberum’s Whittaker. Vivendi in 2011 bought full ownership of SFR by acquiring the 44 percent stake it didn’t already own from Vodafone Group Plc for 8 billion euros.
A combination of SFR’s 5.2 million broadband subscribers with Numericable’s 1.7 million, as of end of September, would bring the new group ahead of Iliad SA’s 5.6 million. SFR had 21.2 million wireless clients at the end of the third quarter.
Europe’s cable and broadband assets are in demand as buyers including billionaire John Malone and Vodafone use acquisitions to bolster offerings of combined phone, TV and Internet services.
Malone’s Liberty Global Plc (LBTYA) is putting the final touches on an acquisition of Dutch broadband provider Ziggo NV, people familiar with the matter said this month. Spanish cable operator Grupo Corporativo ONO SA is close to hiring banks for an IPO, according to people with knowledge of the matter.
Dexter Goei, Altice’s chief executive officer, said on Jan. 7 that the company is weighing acquisition opportunities in all of its markets, including France, Portugal, Belgium and Luxembourg, while its strategy will be mainly focused on consolidating its existing positions.
“We still believe the rationale is there,” Numericable Chief Financial Officer Thierry Lemaitre told an investor conference on Nov. 21, referring to a possible combination with SFR.