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In addition to announcing its plans to overhaul its organisational structure, multinational cable, fibre, telecommunications, content and media company Altice is to simplify the Group’s ownership structure and enhance its organisational flexibility through an exchange offer for the outstanding 22.25 per cent of shares in telco subsidiary SFR Group not currently owned by Altice.
Altice NV has filed with the French Autorité des marchés financiers (AMF) a public exchange offer for all of the remaining shares issued by SFR Group on the basis of eight new Altice NV class A shares for five SFR Group shares. The exchange offer is not subject to any ownership threshold.
The terms of the proposed transaction have been unanimously approved by the Board of Directors of Altice NV. The Board of Directors of SFR Group, including all of SFR Group’s independent Directors, has unanimously recommended the offer to SFR Group shareholders. The proposed transaction, which is expected to close in the fourth quarter of 2016, is still subject to approval by the French AMF and the Netherlands Authority for the Financial Markets (AFM).
The proposed transaction enables shareholders to exchange their SFR Group shares against Altice NV shares with a number of benefits:
SFR Group’s Board of Directors has unanimously recommended to SFR Group shareholders to tender their shares in the exchange offer.
As Altice NV already owns a controlling interest in SFR Group, SFR Group’s Board of Directors has appointed an independent expert, Accuracy, to assess the fairness of the proposed transaction under the supervision of the independent directors, in accordance with the AMF’s rules and recommendations. According to its report, Accuracy has considered the terms of the proposed transaction fair from a financial point of view.
In addition, SFR Group’s Board of Directors has appointed Perella Weinberg Partners to act as financial advisor to the company. As part of their engagement, Perella Weinberg Partners have also been instructed to render an opinion on the proposed exchange ratio. Perella Weinberg Partners have considered the proposed exchange ratio fair from a financial point of view. The opinion letter by Perella Weinberg Partners can be found in the draft note en réponse filed today with the AMF and is available on the AMF and both companies’ websites.
The proposed transaction is structured as a simplified public exchange offer in France in accordance with the General Regulation of the French securities regulator, the AMF, and all applicable securities laws and regulations, in which 8 newly issued class A shares of Altice NV would be offered in exchange for 5 ordinary shares of SFR Group issued and outstanding (including upon the exercise of SFR Group’s stock options) at the time of the offer and tendered.
The total number of shares to be potentially issued would represent 11.8 per cent of the total outstanding number of class A and class B shares of Altice NV including treasury shares (12.8 per cent excluding treasury shares). The new Altice NV class A shares will be listed on Euronext Amsterdam.
There is no minimum acceptance rate.
The SFR Group is the second largest operator in France with a turnover of €11 billion in 2015 and prime positions in all market segments, from consumer, to Business to Business (B2B), local authorities, and wholesale. Featuring the first fibre optic network (FTTB/FTTH) with 8.5 million eligible connections, SFR Group intends to stay ahead with its rollout plan to reach 22 million by 2022. Its leading mobile network covers 99.3 per cent of the population in 3G and 70 per cent in 4G. Thanks to its massive investments, SFR Group aims to create the nation’s new leader in the combined broadband and mobile markets. SFR Group offers a comprehensive range of Internet-access, fixed-line, mobile and audiovisual services. SFR Group is also a solutions expert in the fields of unified communications, Internet of Things and Cloud Computing for businesses. With regard to the Consumer segment, the Group operates under the SFR and RED by SFR brands. On the B2B segment, it operates under the SFR Business brand.
With regard to the media market, its new SFR Media entity consists of SFR Presse, which gathers all the group’s media activities in France (Groupe L’Express, Liberation, Newsco.), SFR RadioTV, which includes the group’s audiovisual activities in France (BFM TV, BFM Business, BFM Paris, RMC, RMC Découverte), and SFR Sport, which encompasses all sport-related activities: BFM Sport, RMC Sport, SFR Sport 1, SFR Sport 2, SFR Sport 3, SFR Sport 4, and SFR Sport 5. SFR Group applies its know-how to provide premium content on non-linear platforms and produce its own innovative and original content. SFR Media also positions itself as the second largest operator in the French digital press sector.
According to Altice, this shows that SFR Group is adopting a new and increasingly integrated model around access and content convergence.