if you missed the article yesterday.
The proposed combination of mobile phone operator Bouygues Telecom and listed French telco Orange could take place at the end of February, French weekly Le Journal du Dimanche reported.
The report cited sources as saying that when listed French conglomerate Bouygues, the owner of Bouygues Telecom, and the French government are having disagreement on the terms of the deal. That is why an announcement could be released around 24 February, when Bouygues releases its results. An announcement was initially expected on 16 February during Orange’s annual results conference.
According to the report, the government is pressuring for the deal value to be reduced from EUR 10bn to EUR 9.5bn.
Bouygues was also initially believed to be eyeing a 15% stake in Orange as part of the payment, leaving the French government with only 19.7% of Orange.
As the French state is keen to retain more than 20% of Orange as it would give it a vetoing minority stake in the company with more than 38% of the voting rights, Bouygues could end up with only 11% of Orange.
A source close to Bouygues confirmed that discussions were ongoing on whether the group could increase its stake later on. The report added that the management of Orange is supporting the requested from the government, as it fears the reduction of the government’s stake in the group could have an impact on the credit rating granted to the company and therefore increase the cost of the debt.
The report went on to say that Iliad/Free and Numericable SFR are also in negotiations for the acquisition of EUR 4.5bn worth of assets so that the deal gets cleared by the competition authorities.
Numericable SFR could pay EUR 500m for some frequencies from Bouygues Telecom and EUR 1.5bn to acquire the fixed internet and B&You clients from Bouygues.
Iliad/Free could pay about EUR 2.5bn for the internet, mobile customers and some frequencies from Bouygues Telecom. The acquisition of the major part of Bouygues Telecom’s retail outlets and its antenna masts network is also on the cards.
The report claimed that the competition authority could ask Orange to co-invest in the deployment of the fiber network in France among with Free.
It could also request Numericable SFr and Orange to lower the gross sales costs for enterprise customers. It could also request the end of the current network mutual agreement between Bouygues Telecom and Numericable SFR.
The report cited a member from one of the French telcos as saying that the mobile networks operated by Bouygues could disappear in the long term.
The original article appeared in print, page 20.
Source Le Journal du Dimanche