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Patrick Drahi Versus Bouygues Bids For SFR : Vivendi Board Meets Today To Decide Between Them
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Some of the details of Patrick Drahi’s bid for Vivendi’s mobile phone unit Société francaise de radiotéléphone, or SFR, were made public earlier this week on Wednesday when his holding company Altice reconfirmed the bid.
In doing so Altice made known its bid was a fully financed cash and share exchange offer to Vivendi for a business combination of Vivendi’s subsidiary SFR and its own subisidiary Numericable France.
Under the terms of the proposed offer, Drahi’s combination would involve a payment to Vivendi in the form of US$15 billion (Euros 10.9 billion) in cash, plus Numericable shares representing a 32% stake in the share capital of what would become the new Numericable-SFR group.
The Altice/Numericable offer remains valid until the close of business on Friday March 14th 2014, – i.e. until later today. Drahi’s competitor for acquiring SFR, French mobile operator Bouygues was quick to jump all over this and raise its own offer slightly yesterday as a result.
Bouygues is now offering Vivendi about US$15.7 billion in cash for 52% of SFR leaving Vivendi with a remaining 42% minority stake. The residual 5% would then be purchased by one of the Bouygues minority shareholders JCDecaux.
As part of its revised offer, Bouygues also said it would subsequently list the enlarged cellphone unit, separately from the parent Bouygues itself, through an IPO that would allow Vivendi to sell a further 15 percent of its stake in SFR.
In response to the increased Bouygues offer itself, Altice is reported to have also raised its own bid late on Wednesday too, with French newspaper Le Monde reporting on Thursday Altice had upped the cash portion of its bid now to as much as US$16.3 billion (Euros 11.75 million).
Last Sunday Bouygues had also sought to defuse the potential anti-trust issues faced by their bid, which would entail merging both the second largest (SFR) and third largest (i.e. themselves) mobile phone companies in France by committing to divest certain frequency and infrastructure assets in order to pass regulatory scrutiny.
There were signs today the French government may have responded favourably to the Bouygues regulatory initiative. France’s industry minister Arnaud Montebourg weighed in to the battle for telecoms company SFR earlier today, to point out “problems” with the bid from Altice. He is quoted by Reuters saying he believed Vivendi “preferred” the Altice/Numericable proposal over that of Bouygues but said he saw “a number of problems” with that outcome.
Plenty of “positioning” from all parties therefore, some of it no doubt even orchestrated by the seller Vivendi themselves to ensure an efficient bidding environment. Now however the bidding count-down is almost over. The two offers, one from Patrick Drahi and one from his new rival, French industrialist Martin Bouygues, are not entirely comparable, but are likely close enough in overall value and the Vivendi Board of Directors, who are meeting today, presumably will now choose one of them.
What their decision be will clearly substantially depend, whatever the monetary values may be, on which partner they will wish to remain in bed with afterwards and whose vision for the future they prefer to endorse, at least until they can unload the rest of the interest later. Or, they could reject both and proceed later with the other option they have to simply spin it off as a free standing entity. Jewish Business news will report the outcome as soon as it is revealed.
