Despite the last-minute efforts of rival Bouygues, Vivendi has chosen Altice as the successful suitor for SFR, with its offer of €13.5 billion in cash and a 20 per cent stake for Vivendi in the merged entity. The total value of the winning bid should reach more than €17 billion, said Vivendi.
Bouygues upped its own bid at the end of last week to €15 billion in cash with a 10 per cent equity stake in Bouygues-SFR, but it was not enough to conquer concerns about the potential regulatory headaches brought by merging numbers two and three in the French mobile market.
Altice, which owns France’s number one cable operator Numericable, was pressured to increase its own offer from €11.75 billion in cash, although it did reduce the 32 per cent equity stake in the merged entity previously offered.
Key to Vivendi’s thinking was that Altice offered a much lower regulatory risk. In fact, SFR and Numericable are not present in the same market segments and their activities are complementary, said Vivendi. The possibility of pursuing a quadplay strategy was an attraction to the Altice bid.
The Altice deal also commits to preserve employment at SFR, a plus for political reasons.
In addition to the €13.5 billion cash element, Vivendi has the potential for an earnout of €750 million, as well as the possibility of selling its 20 per cent stake in the merged entity at a later stake. The total value of Altice’s bid should reach more than €17 billion, said Vivendi.
Vivendi will now consult its works councils on the Altice offer and begin procedures to obtain authorizations from the relevant administrative authorities.