Vivendi to examine Bouygues SFR offer: sources

Thu Mar 27, 2014 4:21pm EDT
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PARIS (Reuters) - Vivendi (VIV.PA: Quote) will examine the latest Bouygues (BOUY.PA: Quote) offer for its SFR telecoms subsidiary while respecting a three-week exclusivity period for talks with a rival bidder, two sources familiar with the matter said.

A sub-committee of Vivendi's board, which earlier evaluated the original two offers, is meeting once more on Thursday to discuss Bouygues' latest bid, the sources said.

The outcome of the battle to buy SFR, France's number-two mobile operator, will reshape the competitive landscape of Europe's third-biggest telecoms market after two years of price war touched off by the arrival of low-cost upstart Iliad's (ILD.PA: Quote) Free Mobile service.

Although Bouygues faces a high hurdle after raising its offer for SFR, given exclusivity had already been granted to rival Numericable NUME.PA, the construction-to-telecoms conglomerate sees a tie-up as key to saving its telecoms unit.

Bouygues's latest offer for SFR, which was submitted six days after Vivendi chose to start exclusive talks with Numericable, raised the cash portion of its offer by 1.85 billion euros ($2.55 billion) to 13.15 billion while cutting the stake Vivendi would hold in a combined SFR-Bouygues Telecom to 21.5 percent from 46 percent.

Bouygues Chairman Martin Bouygues has also sent a letter to Vivendi promising that if his company won the battle for SFR there would be no layoffs plan or voluntary-departure plan for three years following the signature of the deal agreement, according to the letter seen by Reuters.

While Numericable has also promised to rule out a layoffs plan for three years, its starting point is the end of the exclusivity period, or April 4, according to its own letter to Vivendi seen by Reuters.

Both bidders are keen to soothe government concerns over job cuts at a time of record unemployment in France.

Examining the Bouygues offer will be a sensitive task for Vivendi, which must respect the exclusivity granted to Numericable and avoid communication with Bouygues, the sources said.   Continued...

A general view shows French telecom operator SFR's building in the financial district of le Defense at Nanterre, west of Paris, March13, 2014. REUTERS/Charles Platiau