France’s Prime Minister, Manuel Valls, said five issues need to be weighed with SFR-Numericable’s €10 billion bid for Bouygues Telecom: impact on employment, network investment, innovation, customer service and whether proceeds from the country’s upcoming 4G spectrum will be reduced.
“Any operation which doesn’t deal with these major issues won’t get support from the government,” said Valls (pictured). His comment was reported by Bloomberg.
Valls’ intervention follows tough comments by economy minister Emmanuel Macron about the level of debt behind the Bouygues Telecom bid: “I have a big concern in terms of leverage,” he said. “I don’t want to create a too-big-to-fail player”, that would require a taxpayer bailout if it did fail, he added.
He claimed that SFR-Numericable would actually overpay for Bouygues Telecom with its €10 billion offer, so limiting its ability to protect jobs and make investment.
Meanwhile, Bouygues has a board meeting later today (23 June) to discuss the offer made by SFR-Numericable.
SFR-Numericable is already in talks with Altice to offload assets, in anticipation of such a request from regulators. But it might have to give up more to gain support, although the opposition so far is from politicians. The competition authorities, whose job is to approve the deal, have been silent.
Analysts at Berenberg Bank calculate that Altice could sell radio frequencies, shops and towers for between €2 billion and €2.5 billion to its smaller rival, according to a report in the Financial Times.