(Adds details after news conference, analyst, context)
PARIS, Sept 5 European telecoms group Altice
said on Monday it planned to simplify its ownership
structure by exchanging its shares for the outstanding 22.25
percent of France's SFR which it does not already
Altice, owned by cable entrepreneur Patrick Drahi, said in a
statement that it would offer eight Altice class A common shares
for five SFR Group shares.
The move appeared to be bid by the French tycoon to create a
more streamlined structure ahead of expected consolidation among
French and European telecoms companies.
"The goal is for Altice to become the group's only company
to have its equity securities traded on a regulated market,
reflecting the group's expanding globalisation," the company
said in a statement.
The offer is expected to have little impact on Altice's
close to 50 billion euro ($55.80 billion) net debt.
The offer corresponds to a value per SFR Group share of
24.72 euros, Altice said, a 2.6 percent premium to Friday's
close. SFR's shares close at 24.09 euros on Friday.
Shares in SFR jumped more than 6 percent on Monday after the
deal was announced. It was trading at 25.63 euros by 1100 GMT,
making it one of the top gainers among European shares, while
shares in Altice traded flat at 15.44 euros.
ING, which holds a buy rating on Altice, said it expected
most shareholders to react favourably to the offer.
"We believe SFR shareholders give away part of their upside
to Altice in exchange for higher liquidity, diversification into
higher growth markets and increased weighting of cable assets,"
ING said in a note.
The plan was backed by the boards of both companies, the
statement said, adding that the transaction is expected to close
in the fourth quarter.
SFR, the second largest operator in France with a turnover
of 11 billion euros in 2015 has a market cap of about 10.60
billion euros ($11.85 billion) according to Reuters data,
valuing the 22.25 percent stake at about 2.35 billion euros.
Altice said it reserved the right to request from French
market regulator AMF a squeeze-out and delist SFR shares within
3-month period from the closing date of its offer in the event
it holds at least 95 percent of the voting rights in SFR.
"Our updated strategy will significantly strengthen our
subsidiaries and put them into an even better competitive
position to provide our customers with best-in-class services
across all of our markets," said Michel Combes, chief executive
officer of Altice.
($1 = 0.8946 euros)
(Reporting by Bate Felix and Mathieu Rosemain; editing by
Richard Lough and Jason Neely)