European telecom group Altice has confirmed that it has made an offer to acquire France's Bouygues Telecom through its subsidiary Numericable-SFR. As Ivor Bennett reports the offer drove up shares across the French telecoms sector.
Patrick Drahi is a man on a mission. The billionaire telecoms tycoon reaching into his pocket once more in a bid to buy up a rival. His target this time, France's Bouygues Telecom. The Altice majority shareholder reportedly offering 10 billion dollars cash. Analysts value it at barely half that, following a chain of losses. Even so, a deal does make sense for Altice, says Jeremy Batsone-Carr of Charles Stanley. SOUNDBITE (English) JEREMY BATSTONE-CARR, CHIEF STRATEGIST, CHARLES STANLEY, SAYING: "This is a highly competitive market, so part of the reason underpinning this M&A activity is to try and a) get ahead of the next step in the game and b) shore up defences against potential competitive activity from elsewhere." The deal would complete an impressive arsenal for Altice. SFR, Portugal Telecom and US-based Suddenlink among its recent acquisitions in a 36-billion-euro splurge. Subsidiary Numericable-SFR is the one making the offer for Bouygues. If completed, it would make them France's biggest operator in terms of subscriptions, ahead of Orange and low-cost rival Illiad. And Europe's third largest telecoms market would shrink from four to three. Bouygues' board will discuss the deal on Tuesday. But even if they do agree, the state may yet block it, with a 4G spectrum auction due this summer. SOUNDBITE (English) JEREMY BATSTONE-CARR, CHIEF STRATEGIST, CHARLES STANLEY, SAYING: "Taking a quarter of the potential bidders out of the equation does potentially raise issues as to the ultimate price at which these licenses will go. and one has to bear in mind of course it's a major employer." Not a problem for investors though. The prospect of a merger driving up shares across the sector in early trading, with Altice rising 21 percent, and Bouygues 14 percent. Shares in pay-TV group Sky were also up as separate rumours rippled through the FTSE. The Murdoch family has reportedly rebuffed two offers - from Vodafone and french group Vivendi - for their 39 percent stake.