Vivendi Decides To Sell SFR To Altice/Numericable In $23 Bln Deal

(RTTNews) - French media and telecom giant Vivendi SA (VIV.L, VIVEF.PK) Saturday said it has decided to sell its SFR unit to Altice/Numericable in a deal valued at 17 billion euros or $23 billion, rejecting a sweetened offer from conglomerate Bouygues SA (BOUYY.PK).

Cable holding company Altice S.A. had on March 5 made a fully financed cash and share offer to Vivendi for a combination of SFR and Altice's subsidiary Numericable.

Vivendi said its Supervisory Board reviewed the results of the negotiations with Altice/Numericable in its meetings on April 4 and 5. It also carefully reviewed the offers from Bouygues, which had proposed to increase the cash element of its offer to 15 billion euros from 13.15 billion euros, without changing the level of debt.

Vivendi said it selected the most balanced offer between cash upfront and stock participation, allowing the group to benefit from the highest total valuation. The board has chosen to receive 13.5 billion euros at closing of the transaction as well as a potential earn-out of 750 million euros, with a possibility to sell its 20 percent stake at a later stage. This will represent a total value of over 17 billion euros.

Bouygues' offer valued SFR at 16 billion euros before synergies or at 16.5 billion euros with 5 billion euros of synergies secured by savings resulting from disposal of mobile network to Iliad SA's Free. Bouygues also offered Vivendi an earn-out clause of 500 million euros that could lift the total value of SFR to 16.5 billion euros pre-synergies.

After thorough reviews, the Supervisory Board decided unanimously to select the Altice/Numericable offer as offering the highest growth potential, generating the highest value for its customers, employees and shareholders, while best meeting Vivendi's objectives.

According to Vivendi, 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.

Vivendi said all experts consulted concluded that the Altice/Numericable offer presented the lowest competition risks. SFR and Numericable are not present on the same market segments and their activities are complementary.

Further, the plan presented by Altice/Numericable fully guarantees development of sustainable employment.

Vivendi said it would consult its Works Councils on the plan presented by Altice/Numericable.

Meanwhile, Bouygues acknowledged Vivendi's decision and informed that on Saturday morning it submitted to Vivendi an offer that brings the cash component to 15.5 billion euros, whilst proposing an equity interest of 5 percent in the new Bouygues Telecom-SFR entity as well, with no liquidity constraints on this interest.

This offer valued SFR at 16 billion euros before synergies or at 17 billion euros including the synergies and an earn-out clause of 500 million euros.

Vivendi closed up 0.4 percent on Friday at 20.56 euros, while Bouygues added 0.6 percent to settle at 30.83 euros.