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Bouygues increases offer for SFR

French operator Bouygues Telecom has submitted an improved offer to conglomerate Vivendi to take ownership of rival SFR.

The new offer stands at €11.3bn in cash – €800m more than the initial offer of €10.5bn. Bouygues is also offering a 43 per cent stake in the new entity that would be formed by the merger, which is three per cent less than the 46 per cent stake it had originally offered to Vivendi. But Bouygues argues that the improved offer actually values SFR at nearly €20bn factoring in all synergies, which is €1bn more than the valuation implied by the original offer. Bouygues’ interest in the new entity following the merger would be 52 per cent, up from 49 per cent in the previous offer.

Bouygues appears to be going head to head with European cable operator group Altice for the French mobile operator. On March 5 2013, Altice made an offer of €10.9bn in cash as well as shares representing 32 per cent of the share capital of a new entity that would be formed by SFR and cable provider Numericable, in which Altice owns a 40 per cent stake. Altice said its offer will only remain valid until March 14th 2013.

Earlier this week, Bouygues Telecom also announced that it has entered into exclusive negotiations with rival Free, owned by parent company Iliad, to sell its mobile phone network and portfolio of frequencies for “up to €1.8bn”. The deal is conditional upon Bouygues successfully completing its bid for SFR.

Bouygues Telecom added that it is planning an initial public offering (IPO) of the new entity formed by the merger with SFR, as soon as it is completed. This would offer Vivendi an immediate opportunity to monetise its interest in the mobile operator, Bouygues added.


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