Tycoon Drahi Said to Prepare for Bouygues Telecom Takeover
2015-02-13 17:51:14.614 GMT
By Manuel Baigorri, Matthew Campbell and Francois de Beaupuy
(Bloomberg) -- Cable billionaire Patrick Drahi’s Altice SA
is stepping up plans for a potential takeover of mobile carrier
Bouygues Telecom, setting the stage for more consolidation in
France’s telecommunications industry, according to people
familiar with the matter.
Drahi’s media and telecom group is examining the financial
and regulatory obstacles to a transaction with France’s third-
largest wireless provider, and advisers to the two companies
have held informal discussions about a potential deal, the
people said, asking not to be identified discussing a private
matter. Altice believes a transaction is feasible and could pass
muster with authorities and French politicians, they said. No
formal offer has been made and Altice could still decide against
proceeding with a bid, they said.
Discussions of a takeover of Bouygues Telecom by Xavier
Niel’s Iliad SA stalled last year over valuation disagreements,
with owner Bouygues SA seeking as much as 8 billion euros ($9.1
billion) for the asset, people familiar with the matter said in
June. For Drahi, an acquisition of Bouygues Telecom would be
Altice’s third multi-billion dollar deal in a year, after it
acquired French mobile-service provider SFR and then agreed in
December to buy Portugal’s biggest carrier from Oi SA.
A spokesman for Luxembourg-based Altice declined to comment
on what he referred to as rumors. A spokesman for Paris-based
Bouygues declined to comment, referring to an October statement
that the company is implementing a stand-alone strategy in a
market with four operators.
‘Natural Buyer’
Altice Chief Executive Officer Dexter Goei said in November
that Altice would be the “most natural buyer” for Bouygues
Telecom.
A combination of SFR with Bouygues Telecom under Altice
would create a new national leader in France with more than 30
million wireless customers, supplanting Orange SA, according to
data compiled by Bloomberg Intelligence. It would also reduce
the country’s number of wireless networks to three from four,
following similar moves in Germany, Ireland and Austria.
Drahi’s advisers believe competition concerns can be
resolved in part because French officials supported a 2014
proposal to merge Bouygues Telecom and SFR, then owned by
Vivendi SA, one of the people said. However, limiting job losses
would be a key concern for politicians in France’s barely-
growing economy, making integration a delicate challenge should
a deal proceed, the person said.
Bouygues Telecom reported 2013 earnings before interest,
taxes, depreciation and amortization of 880 million euros and
Ebitda of 538 million euros in the first nine months of 2014.
European carriers are merging as costs rise for high-speed
networks and the pace of smartphone adoption slows, putting
pressure on profits. In the U.K., BT Group Plc this month agreed
to acquire wireless leader EE Ltd. for about $19 billion.
For Related News and Information:
Iliad-Bouygues Telecom Deal Said Stymied by $4 Billion Gap
Billionaire Drahi to Buy Oi’s Portuguese Assets for $9.1 Billion
Billionaire Drahi to Buy Vivendi’s SFR in $23 Billion Deal
Top Deal Stories: DTOP<GO>
Bloomberg Industries: BI TELC <GO>
Top Technology Stories: TTOP <GO>
--With assistance from Dinesh Nair in London and Jacqueline
Simmons in Paris.
To contact the reporters on this story:
Manuel Baigorri in London at +44-20-3525-4457 or
mbaigorri@bloomberg.net;
Matthew Campbell in London at +44-20-3525-8684 or
mcampbell39@bloomberg.net;
Francois de Beaupuy in Paris at +33-1-5365-5051 or
fdebeaupuy@bloomberg.net
To contact the editors responsible for this story:
Kenneth Wong at +49-30-70010-6215 or
kwong11@bloomberg.net;
Aaron Kirchfeld at +44-20-3525-8830 or
akirchfeld@bloomberg.net
Elizabeth Fournier
2015-02-13 17:51:14.614 GMT
By Manuel Baigorri, Matthew Campbell and Francois de Beaupuy
(Bloomberg) -- Cable billionaire Patrick Drahi’s Altice SA
is stepping up plans for a potential takeover of mobile carrier
Bouygues Telecom, setting the stage for more consolidation in
France’s telecommunications industry, according to people
familiar with the matter.
Drahi’s media and telecom group is examining the financial
and regulatory obstacles to a transaction with France’s third-
largest wireless provider, and advisers to the two companies
have held informal discussions about a potential deal, the
people said, asking not to be identified discussing a private
matter. Altice believes a transaction is feasible and could pass
muster with authorities and French politicians, they said. No
formal offer has been made and Altice could still decide against
proceeding with a bid, they said.
Discussions of a takeover of Bouygues Telecom by Xavier
Niel’s Iliad SA stalled last year over valuation disagreements,
with owner Bouygues SA seeking as much as 8 billion euros ($9.1
billion) for the asset, people familiar with the matter said in
June. For Drahi, an acquisition of Bouygues Telecom would be
Altice’s third multi-billion dollar deal in a year, after it
acquired French mobile-service provider SFR and then agreed in
December to buy Portugal’s biggest carrier from Oi SA.
A spokesman for Luxembourg-based Altice declined to comment
on what he referred to as rumors. A spokesman for Paris-based
Bouygues declined to comment, referring to an October statement
that the company is implementing a stand-alone strategy in a
market with four operators.
‘Natural Buyer’
Altice Chief Executive Officer Dexter Goei said in November
that Altice would be the “most natural buyer” for Bouygues
Telecom.
A combination of SFR with Bouygues Telecom under Altice
would create a new national leader in France with more than 30
million wireless customers, supplanting Orange SA, according to
data compiled by Bloomberg Intelligence. It would also reduce
the country’s number of wireless networks to three from four,
following similar moves in Germany, Ireland and Austria.
Drahi’s advisers believe competition concerns can be
resolved in part because French officials supported a 2014
proposal to merge Bouygues Telecom and SFR, then owned by
Vivendi SA, one of the people said. However, limiting job losses
would be a key concern for politicians in France’s barely-
growing economy, making integration a delicate challenge should
a deal proceed, the person said.
Bouygues Telecom reported 2013 earnings before interest,
taxes, depreciation and amortization of 880 million euros and
Ebitda of 538 million euros in the first nine months of 2014.
European carriers are merging as costs rise for high-speed
networks and the pace of smartphone adoption slows, putting
pressure on profits. In the U.K., BT Group Plc this month agreed
to acquire wireless leader EE Ltd. for about $19 billion.
For Related News and Information:
Iliad-Bouygues Telecom Deal Said Stymied by $4 Billion Gap
Billionaire Drahi to Buy Oi’s Portuguese Assets for $9.1 Billion
Billionaire Drahi to Buy Vivendi’s SFR in $23 Billion Deal
Top Deal Stories: DTOP<GO>
Bloomberg Industries: BI TELC <GO>
Top Technology Stories: TTOP <GO>
--With assistance from Dinesh Nair in London and Jacqueline
Simmons in Paris.
To contact the reporters on this story:
Manuel Baigorri in London at +44-20-3525-4457 or
mbaigorri@bloomberg.net;
Matthew Campbell in London at +44-20-3525-8684 or
mcampbell39@bloomberg.net;
Francois de Beaupuy in Paris at +33-1-5365-5051 or
fdebeaupuy@bloomberg.net
To contact the editors responsible for this story:
Kenneth Wong at +49-30-70010-6215 or
kwong11@bloomberg.net;
Aaron Kirchfeld at +44-20-3525-8830 or
akirchfeld@bloomberg.net
Elizabeth Fournier