Vivendi accepts €17bn Altice/Numericable SFR bid
April 7, 2014
Vivendi has confirmed that its Supervisory Board has decided unanimously to accept a bid from Altice/Numericable for its SFR mobile unit. The definitive acceptance follows a mutually-agreed exclusive period signed on March 14th.
The Board said it also carefully reviewed letters and documents that the Bouygues Group decided to send it during this exclusive period regarding a combination between SFR and Bouygues Telecom.
The Board said the offer from cable holding group Altice and its Numericable unit gave the highest growth potential, generating the highest value for its customers, employees and shareholders, while best meeting Vivendi’s objectives.
The Altice/Numericable project is based on fixed and mobile convergence, with synergies resulting from the interdependence of the two merged entities’ networks. SFR-Numericable’s positions in very high speed fixed and mobile will generate new growth opportunities, an acceleration of the number of connected lines and very high quality offers for enterprise and retail customers. They will also offer important development opportunities for Quadruple Play and new usage. They are consistent with the French government’s ‘France Tres Haut Debit’ plan launched on February 2013.
All the experts consulted concluded that the Altice/Numericable offer presents the lowest competition risks. SFR and Numericable are not present on the same market segments and their activities are complementary.
Vivendi says it selected the most balanced offer between cash upfront and stock participation allowing the group to benefit from the highest total valuation. While pursuing its announced strategy to focus on media, Vivendi wants to support SFR, its 27 year-long subsidiary, by strengthening its industrial and social structure.
The Vivendi Supervisory Board therefore chose to receive €13.5 billion at closing of the transaction as well as a potential earn-out of €750 million, with a possibility to sell its 20 per cent stake at a later stage. This should represent a total value in excess of €17 billion.
This balance between cash upfront and future upside from industrial value creation fits with Vivendi’s philosophy, an industrial and financial group concerned about creating long term value in the interest of shareholders, employees and consumers.
Vivendi will now, as part of a new mutually-agreed exclusivity agreement with Altice/Numericable, consult its Works Councils on the plan presented by Altice/Numericable and begin procedures to obtain authorizations from the relevant administrative authorities.
Vivendi will report to the Shareholders Meeting on June 24 on how this transaction has been conducted.
The decision puts an end to SFR’s demerger plan.
Altice separately confirmed it was acquiring the 21.32 per cent stake in Numericable Group owned by Carlyle Cable Investment SC and the 13.27 per cent stake in Numericable Group-owned CCI (F3) S.a.r.l (an affiliate of Cinven), in total a 34.6 per cent stake in Numericable Group, giving it a holding of some 60 per cent of the new entity, with the final 20 per cent as the free-float.
Altice might consider raising up to an additional €550 million equity to help finance the overall transaction.