Outsider Patrick Drahi defies French establishment to win SFR

Fri Mar 14, 2014 2:28pm EDT
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By Nicholas Vinocur and Leila Abboud

PARIS (Reuters) - When Franco-Israeli telecoms billionaire Patrick Drahi entered the race to acquire Vivendi's SFR (VIV.PA: Quote), his powerful rivals seemed to suddenly agree on a common goal: keeping him out.

Fellow tycoon Martin Bouygues, whose conglomerate has telecoms to construction holdings in France, mounted a late bid for SFR against Drahi's Numericable NUME.PA and rallied strong connections in the government.

Xavier Niel, founder of low-cost operator Iliad (ILD.PA: Quote) who would benefit if a rival bid from Bouygues (BOUY.PA: Quote) succeeded, slammed Drahi for skirting taxes with his company based in Amsterdam and homes in Geneva and Tel Aviv.

On Friday as Vivendi's board prepared to weigh the bids, France's Industry Minister Arnaud Montebourg went on morning radio to slam Drahi's bid as too leveraged and bad for France.

Through the three-week takeover battle, Drahi, who came to France from Morocco as a teenager, was not deterred.

On Friday Vivendi picked Drahi's Numericable bid of 11.75 billion euros ($16.36 billion) in cash and additional shares over that of Bouygues. The two sides will undertake three weeks of exclusive talks to finalize the deal.

Working with a handful of lieutenants, who have helped him build an empire of cable and television companies from the Dominican Republic to Belgium, Drahi deliberately kept a low profile. He met with regulators and ministers to explain his plan for SFR, France's second-biggest telecom carrier and employer of 9,000, and ignored the media hubbub.

"Patrick has been working on this project for years," said Numericable executive Jerome Yomtov. "He was very calm."   Continued...

Patrick Drahi, Franco-Israeli businessman and founder of Numericable, poses during a roadshow for the Israel-based broadcast news channel i24 News in Paris March 12, 2014. REUTERS/Benoit Tessier