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Altice could buy Bouygues Telecom in French consolidation deal- CEO
November 20, 2014 / 6:03 PM / 3 years ago

Altice could buy Bouygues Telecom in French consolidation deal- CEO

BARCELONA, Nov 20 (Reuters) - Numericable, which is about to complete the acquisition of SFR, France’s second biggest mobile network operator, is also open to buying SFR’s smaller rival Bouygues Telecom, the chief executive of Numericable’s owner said on Thursday.

“We see ourselves as the natural buyer (of Bouygues). We have a huge revenue base so there would be big synergy potential,” said Dexter Goei, chief executive of Altice , at the Morgan Stanley Technology, Media and Telecoms Conference in Barcelona.

A price war sparked by low-cost telecoms firm Iliad’s arrival in the mobile market in January 2012 has resulted in open talk of consolidation, with Bouygues Telecom the centre of attention after losing out to Numericable in the bidding to acquire SFR from Vivendi.

A takeover of Bouygues Telecom would be another bold move for Altice, the holding company of Franco-Israeli billionaire Patrick Drahi, since it already carries high debt and would have to sell off chunks of Bouygues to get a takeover past the regulators.

It is also still digesting the SFR-Numericable merger, which is expected to close next Thursday and has just bid to buy the Portuguese business of Portugal Telecom from Brazil’s Oi which it says is worth 7.025 billion euros.

Goei said that the cash outlay to buy PT Portugal would be around 5 billion euros.

Nevertheless, Goei said Altice is also open to holding talks with Bouygues, which is controlled by construction and media tycoon Martin Bouygues and his family.

“If on Friday we get a phone call from Bouygues, then why not? We’ll have that discussion. I would be surprised if there is not some effort in 2015 to get French consolidation done.”

He said Altice would not need a capital increase to fund an acquisition of Bouygues, which analysts value at around 4.5 to 5 billion euros ($5.6-6.4 billion). Nor would the deal lead to unacceptable debt levels, he said, since Altice would have time to deleverage as competition regulators were likely to need eight to 12 months to approve the acquisition.

Encouraged by the French government, market leader Orange, Iliad and Bouygues held three-way talks about a consolidation deal earlier this year, but they collapsed over valuation and how to split up Bouygues between the two buyers.

On Thursday Orange’s chief executive Stephane Richard reiterated at the conference that he did not see room for four operators in France.

“Given the level of investments needed in fixed and mobile roll-out, and upcoming spectrum allocation, we will see consolidation come back to the table again,” he said. ($1=0.7973 euros) (Editing by Greg Mahlich)

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