Link to google Transaltion :{http://bit.ly/1bX8nAb}
Link to French Article : {http://bit.ly/1eGZFWq}
Numericable ready to make an offer on SFR before its listing
Vivendi has given the timing of operations, promising a split of SFR in June. Numericable should not seek to borrow heavily the second operator in the country.
So far, no offer has yet been made and discussions are not officially reopened, despite the friendly meeting between Jean-René Fourtou (Chairman of Vivendi) and Patrick Drahi (President of Altice funds) in December . Numericable but does not make mystery: it is now ready to go on the offensive on SFR.
Vivendi is who first relit the wick talking about splitting operator. The speculation on a wave of consolidation in the telecoms France went back a year after failed attempts of rapprochement SFR-Iliad and SFR-Numericable. The controlled Altice cable operator had access to books SFR in the previous episode, and he can use studies at the time. Thus, a battalion of consultants worked on possible synergies. They then exceeded 5 billion euros. For example, may use the SFR network Numericable and stop renting Orange copper they mutualiseront their investments in optical fiber and maintenance costs, competition will reduce the fixed market, they will pay less costs interconnection to other operators, the information system will be put on a diet ...
The situation changed
Since the failed attempt of it a year ago, the situation has changed and rather in favor of Numericable. First, Vivendi is put into the syringe by announcing separated from its telecom subsidiary, number two in the French market by trading in June. Now, it is almost impossible to reverse. But the IPO SFR may be a high-wire act, as mobile revenues will likely still slipping in 2014 and in 2015. In fact, a new wave of price declines appeared with the introduction of 4G 3G price in December.
In addition, on February 25, Vivendi publish its annual results and the revised carrying value of SFR for its listing. This valuation will certainly be less generous than when SFR bought out its minority shareholder , Vodafone. In this context, rather than make a IPO delicate, Vivendi has an incentive to sell SFR. Before May if possible, because after the train of trading will be launched.
Altice traded
Second new group Patrick Drahi changed dimension. He took 40% stake in cable operator via its holding Altice to consolidate in its accounts. He introduced the girl traded in November, then the mother in January . This strategic move allows him to raise money for capital increase , while valuations in the cable in Europe are high (9-10 times EBITDA). It can also now pay paper acquisitions.
According to our information, Vivendi does not want to give SFR a buyer who will appoint all with excessive debt. The scenario studied by Oddo, for example, considering an LBO with almost 17 billion euros of debt (4.6 times Ebitda) seems unlikely. Slightly above 3 times the gross operating surplus ratio would increase with better policies.
Consolidation is not a dirty word
Policy precisely. This is the third factor of change. Consolidation is not a dirty word among regulators and the executive. The speech subtly evolved Bercy, where the collapse of Bouygues Telecom and general impoverishment of incumbents, past the mill low price is feared. That is why the authorities have encouraged the sharing of networks between SFR and Bouygues Telecom .
In a second step, the acquisition of SFR Numericable would have the advantage of not reducing the number of mobile operators in France. This does not upset the doctrine of four market players. In reality, the taboo has already fallen in their minds. For the third step should logically be marriage Iliad and Bouygues Telecom - Bouygues if Martin agrees to sell. But the heart has its reasons which reason does not know.