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Bouygues ups offer for SFR again

Level 3 is spending $6.7bn on the deal

French operator Bouygues Telecom is not admitting defeat in its pursuit to acquire rival SFR, having again increased the cash part of its offer to parent group Vivendi. The offer now stands at €13.15bn.

Last week, French conglomerate Vivendi announced that it had entered into exclusive negotiations over the sale of its French telecoms operation SFR, with investment vehicle and cable operator Altice. In doing so, it rebuffed Bouygues’ earlier offer of €11.3bn in cash and a 43 per cent stake in the new entity that would be formed by the merger. This in itself was an €800m improvement on its initial offer of €10.5bn but a three per cent less stake than the 46 per cent stake it had originally offered to Vivendi.

However, the Board did not rule out Bouygues’ offer entirely and said that at the end of the three weeks, it will meet again to examine the next steps and “decide if it should put an end to the other options envisaged”.

Seemingly unwilling to wait, Bouygues submitted its  latest offer on Thursday. The €13.15bn in cash on the table is a €1.85bn improvement on its previous offer and €1.4bn more than Altice’s offer, but the operator is now offering just 21.5 per cent of the new entity. Altice’s offer consists of an €11.75bn payment to Vivendi as well as a 32 per cent equity share in the combined listed entity that would be formed by a merger between SFR and Numericable.

According to Bouygues, a merger with SFR would generate €10bn in synergies and the firm claims that as a result, this values SFR at €17.4bn. If the merger goes ahead, Bouygues plans an IPO of the new entity, which it says with give Vivendi an immediate opportunity to monetise its stake in the entity. It also claims that the reduced size of the stake will make it easier for Vivendi to sell its stake whenever market conditions are at their optimum.

In a bid to allay competition authorities’ concerns over a merger between the two mobile operators, Bouygues has also 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 was conditional upon Bouygues successfully completing its bid for SFR.


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