French government hardens stance on Altice's bid for Bouygues Telecom
By Leila Abboud and Leigh Thomas
PARIS (Reuters) - European telecoms group Altice's ATCE.AS bid for Bouygues Telecom risks creating a French operator that is "too big to fail" and that could threaten jobs, France's economy minister said on Monday, hardening his government's opposition.
The companies confirmed earlier that an offer has been submitted, sending share prices up sharply across the sector as investors hoped consolidation in the French mobile market would end a three-year-old price war.
Patrick Drahi, the billionaire backer of Altice, the majority owner of France's second-biggest telecom operator Numericable-SFR NUME.PA, wants to buy smaller rival Bouygues Telecom as part of a deal-making spree that has seen him buy four companies in the past 18 months.
Sources earlier told Reuters his bid valued Bouygues at about 10 billion euros ($11 billion), and was already financed by banks including BNP Paribas and JP Morgan.
But despite the high price on offer, it's far from certain that Drahi can overcome the government's opposition and convince Bouygues Telecom's owner, French tycoon Martin Bouygues, to part with the unit he founded and added to the construction-to-media conglomerate founded by his father.
The Bouygues board will meet on Tuesday at 1600 GMT to discuss the Altice offer, a source close to the situation said.
"The deal is far from done, and the Bouygues board will take account of several factors, not just the size of the cheque," the source said. It will have to consider all aspects including market competition issues and the government's position, as well as whether the deal could lead to major job cuts.
The deal would reduce the number of network operators in France to three from four at a time when the merits of similar reductions already made elsewhere in Europe are being questioned by the competition regulators. Continued...