French international media and entertainment Vivendi has received a new offer from rival telecom firm Bouygues for its SFR mobile phone unit. Just one week ago the Vivendi board had come down in favour of a 21 day period of exclusive negotiations with Patrick Drahi, on behalf of his controlled affiliates Altice/Numericable.
Accordingly, today Vivendi simply said it had received the new offer from Bouygues, adding “It should be kept in mind that the Vivendi Supervisory Board decided on March 14th to enter into exclusive negotiations with Altice for a period of three weeks.”
The cash portion of Bouygues new bid, at about US$18 billion billion (Euros 13.1 billion) is higher than before, and above the US$16.3 billion (Euros 11.75 billion) cash portion that Altice is offering. However the two bids are otherwise not directly comparable, as each leaves Vivendi with a residual share interest but in different ways.
The Bouygues proposal leaves Vivendi with a 33% remaining stake in SFR itself while the Altice offer gives Vivendi a 32% ongoing stake in the combined SFR/Numericable who would become merged together into an existing publicly listed vehicle.
Vivendi has so far preferred this philosophical approach as likely leading to a more dynamic, successful and therefore potentially more valuable and more liquid investment instrument.
Even so one can be sure though that in the final stages of the 21 day exclusive negotiating period, the dynamics of Vivendi’s tactics may have been bolstered by the new offer, which is coming in from left field, as it were, and could lead to another slight increase in its offer by Altice to get the job done.
Or, conceivably this late intervention by Bouygues might be recognized by both Vivendi and Drahi as simply a late spoiling tactic, in order to push a competitor into paying too much without expecting to be a winning bid in itself.
Finally with many people currently now expecting the Altice SFR bid to proceed, some market chatter has switched to the potential divestiture of Bouygue’s own mobile unit to the smallest French operator Iliad – which has already shaken up the whole French mobile phone industry with low prices in the last couple of years.