Altice Chief Says It’s ‘Natural Buyer’ for Bouygues TelecomMarie Mawad
Altice SA, the cable holding company owned by billionaire Patrick Drahi, said it’s the “most natural buyer” for Bouygues SA’s telecommunications unit in France.
Altice, which holds a stake in France’s largest cable provider Numericable Group, would be open to discussing a deal to buy all of Bouygues Telecom after completing its $23 billion acquisition of local mobile-phone company SFR from Vivendi SA on Nov. 27, Chief Executive Officer Dexter Goei said yesterday.
“We’re very focused on closing SFR for now,” Goei said during an investor conference organized by Morgan Stanley in Barcelona. “It closes on Thursday. If on Friday we get a call from Bouygues, why not? I would be surprised if there’s not some effort in 2015 to get this done.”
France’s government and its four mobile carriers -- from leader Orange SA to the smallest, Iliad SA -- have sought consolidation this year to halt a decline in phone bills as competition intensifies. Those efforts have failed partly because of differences in valuation. After Vivendi agreed to sell SFR to Altice and Numericable, the focus has moved to Bouygues Telecom as the next possible target.
Bouygues Telecom has a policy of remaining independent in France and this is starting to bear fruit in a market with four mobile-phone operators, said a Bouygues spokesman, who asked not to be named in line with company policy. It is watching how the market develops, he added.
Altice has argued that buying SFR makes sense because of cost savings from merging the two companies’ networks and brands. A Bouygues transaction would generate “massive synergies” from infrastructure, staff and marketing, Goei said. SFR ranks second and Bouygues Telecom third by revenue.
“If we were to do something in the first quarter next year -- France is the big elephant in the room -- our balance sheet could definitely handle it because we’re deleveraging quickly,” the CEO said. “We view ourselves as the most natural buyer” for Bouygues Telecom.
Bouygues shares rose 3.3 percent to 29.80 euros at 12:59 p.m. in Paris. Numericable added 5.8 percent to 32.53 euros. Altice advanced 2.2 percent to 48 euros in Amsterdam.
At the same conference, Iliad Chief Financial Officer Thomas Reynaud said the company doesn’t intend to take the lead in consolidating the French market. Orange CEO Stephane Richard said while there isn’t room for four wireless network operators in France, he doesn’t expect a major move in the near term.
“Whether Bouygues is a seller is not so clear,” Richard said in an interview. “Consolidation is necessary, I wish for it to happen, but my feeling is that the conditions aren’t met at this point to have a deal quickly in France.”
Drahi, whose cable empire stretches from Israel to the Caribbean, this month made a 7.025 billion-euro ($8.8 billion) bid for Oi SA’s Portuguese phone assets. Goei said the pursuit won’t hamper Altice’s ability to do another transaction of that size without raising funds.
Altice, which owns cable assets Cabovisao and Oni in Portugal, is competing with Apax Partners LLP and Bain Capital Partners LLC for Oi’s Portuguese assets. The private-equity firms are offering 50 million euros more.
Drahi’s Portugal offer also faces another hurdle. Isabel dos Santos, the daughter of Angola’s president, made a 1.2 billion-euro bid for Portugal Telecom SGPS SA, the holding company that owns a minority stake in Oi.
Portugal Telecom no longer controls the operating assets of the country’s former phone monopoly after its merger with Brazil’s largest landline carrier. Still, the holding company has veto rights over a sale of the Portuguese assets, people familiar with the matter have said. Dos Santos has until Dec. 1 to register her offer, according to the Portuguese securities regulator.
Apax and Bain are working to secure financing for their bid for PT Portugal SGPS SA and plan to submit a binding offer Nov. 28, people with knowledge of the matter have said.