Numericable Net Jumps as SFR Deal Completion Seen This YearMarie Mawad
Numericable Group, France’s largest cable operator, said it’s on schedule to close its purchase of phone carrier SFR by year-end, after reporting a rise in quarterly profit because of cheaper financing. Shares jumped.
Net income rose to 35 million euros ($48 million) in the first quarter from 23.6 million euros a year earlier, while sales grew 1 percent to 327.6 million euros, Champs-sur-Marne, France-based Numericable reported yesterday. The company, which raised funds during an initial public offering in November, said the IPO helped reduce borrowing costs and boost profit.
Billionaire cable tycoon Patrick Drahi, who controls Numericable through his Altice SA telecommunications holding company, agreed last month to buy France’s second-largest phone operator, Vivendi SA’s SFR, in a deal valued at more than 17 billion euros. Numericable predicts the French watchdog will respond to the proposed merger in the third or fourth quarter.
Numericable shares gained as much as 6.9 percent in Paris and were up 2.1 percent to 37.70 euros at 9:47 a.m. The stock has jumped about 52 percent since the IPO on November 8.
“We’re in an interactive process with the competition authority -- we’re talking,” Numericable’s General Secretary Jerome Yomtov said during a conference call. “It’s too early to say whether they’ll respond in October or at year-end.”
Telecommunications industry executives in France as well as Economy Minister Arnaud Montebourg have called for consolidation in the country to help end price wars prompted by Iliad SA’s entry into the mobile market in January 2012, as France’s fourth operator. Montebourg said the purchase of SFR raised questions about the future of Iliad and rival Bouygues SA.
The sale of SFR marks the end of Vivendi’s strategic revamp, aimed at divesting telecommunications assets to refocus the company on media, around pay-TV unit Canal Plus, record label Universal Music Group Inc. and Brazilian Internet provider GVT. Vivendi has also divested stakes in video-game maker Activision Blizzard Inc. and said it closed the sale of Moroccan phone company Maroc Telecom today.
After divesting more than $30 billion of assets in the past year, Vivendi, which will report earnings on May 15, has said it will return 5 billion euros to shareholders by 2015 through dividends and share buybacks.