Numericable shares drop as it holds out for SFR deal

French cable operator Numericable’s controlling shareholder Altice has set a deadline of Friday for its €10.9 billion offer to acquire SFR to be accepted.

Shares in Numericable plunged yesterday on news that Bouygues Telecom was in exclusive talks with rival Iliad Telecom over the sale of its mobile arm in order to secure regulatory approval for its own acquisition of SFR, preempting Altice’s own bid. Shares in Bouygues and Iliad Telecom both rose on the news.

Altice said its offer was fully financed and would involve a payting of €10.9 billion in cash and Numericable shares representing 32% of the share capital of the combined group.

“We believe that this is the most compelling offer for Vivendi and the French telecommunications market. An SFR/Numericable combination is the only credible project to bring fibre and very high speed broadband to the entire country, delivering credible and realisable advantages for employees, consumers and suppliers in France,” the investment group said.

Numericable took the step of issuing a communiqué this morning underlining that the Altice offer was “the most solid and credible industrial project for the French telecom sector”.

It said that the merger of Numericable and SFR would secure employment and investment in both entities andwould facilitate an increase and speeding up of investment in fibre networks in France, helping meet the government’s high-speed access goals.

“This project is incontestably the most advantageous for employees, customers and for France’s ambitions in the telecom market,” the group said.

Altice’s move comes amidst signs that Bouygues’ bid is gaining momentum, with industry minister Arnaud Montebourg telling Le Parisien Dimanche magazine that the French telecom sector would, in his opinion, be stronger if it comprised three main operators.

However, economy minister Pierre Moscovici declined to express a preference for Bouygues’ offer in an interview with BFM TV, saying that the goernment looked at three criteria in weighing up the rival offers – employment, investmetn and the interest of consumers.

Bouygues has tabled a €10.5 billion offer that would leave Vivendi with a 46% stake in SFR.