Numericable’s “stingy” offer for Vivendi’s stake
February 19, 2015
By Chris Forrester
Numericable (and Altice) are looking to buy the 20 per cent stake in its company held by Vivendi, and is offering €40 a share, which is about 25 per cent below their market value.
Investment bankers Exane BNP-Paribas states that the offer “is a bit stingy”, and argues that even with the obvious benefit of banking a giant cash sum (€3.9 billion) the offer makes little sense.
“Vivendi [has plenty of cash] and does not need more immediately unless it plans a mega cash return (or, very unlikely, big M&A). Securing cash now has its merits but not at a 25 per cent discount in our view.”
“As a result, we believe it makes little sense for Vivendi to accept Numericable’s offer. However, should Numericable revise its offer to €45, then the value destruction would be relatively modest (c €0.5 per share, or €600 million) and could be justified by crystallising NC’s stake value at what is a reasonable discount to the current record share price level,” says the bank’s note to clients.