Altice Is Said to Have No Plan to Raise SFR Offer for Now

Cable tycoon Patrick Drahi’s Altice SA, which is in exclusive talks to buy Vivendi SA’s SFR phone unit, has no plan to sweeten its offer even after rival bidder Bouygues SA did, according to a person familiar with the matter.

Altice believes it still has Vivendi’s support, based on the total value of its offer as well as other criteria such as antitrust and financing risks, and the guarantee of a quick exit for Vivendi from the business, the person said, asking not to be identified because the deliberations are confidential. Still, Altice has the right to revise its bid during the three-week exclusive period that ends April 4, the person said.

At stake is who will end up owning France’s second-largest phone company, with each bid valuing the business at more than $20 billion. Bouygues, seeking to merge SFR with its wireless unit, yesterday increased the cash portion of its offer with the financial backing of a French government-controlled fund.

“It is a very close call,” Sanford C. Bernstein analysts led by Claudio Aspesi said in a note to clients. “There is a possibility that Numericable tops the cash portion again.”

Backing for the Bouygues bid shows the government supports a reduction in the number of France’s mobile carriers to three from four. Altice, which wants to unite SFR with its cable unit Numericable Group, is open to mergers in the wireless industry after the planned combination is completed, the person said.

Representatives for Drahi and Vivendi declined to comment.

Revised Proposal

Bouygues shares fell 0.9 percent to 30.39 euros in Paris at 2:56 p.m. Vivendi lost 1.2 percent, Numericable added 0.5 percent, and Altice fell 0.2 percent in Amsterdam.

Bouygues’s revised proposal includes 13.15 billion euros ($18.1 billion) in cash -- an increase of 1.85 billion euros -- and a 21.5 percent stake in the entity created from a merger of SFR with Bouygues Telecom. Altice offered 11.75 billion euros in cash and a 32 percent stake.

The Bouygues offer values SFR at 18.4 billion euros including potential cost savings and revenue benefits, Bernstein analysts estimate. Altice’s bid values SFR at 18.6 billion euros, they estimate.

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

The company last week defied opposition from politicians including Industry Minister Arnaud Montebourg by choosing to hold talks with Altice.

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