Vivendi enters exclusive talks to sell SFR to Altice

French media and telecom group Vivendi board has chosen the offer of Altice for SFR, rejecting a lower bid from Bouygues Telecom. The company said its supervisory board will enter into exclusive negotiations with Altice for three weeks in order to reach a final agreement. The company said it considers the offer from Altice, which owns cable operator Numericable, to be the most pertinent for the group's shareholders and employees, with the opportunity for effective execution. Vivendi said the offer also achieves its objective to rapidly become a leading European media and content player and develop SFR as a dynamic leader in high-speed fixed and mobile telephony. 

The Altice offer comprises an EUR 11.75 billion payment to Vivendi and a 32 percent share in the equity of the combined listed entity. It also provides Vivendi with pre-determined exit conditions. That compares to Bouygues' improved offer of EUR 11.3 billion cash and a 43 percent stake in the new company. 

At the end of the three weeks, Vivendi's supervisory board will meet again to examine the next steps and to decide if it should put an end to the other options envisaged. Altice welcomed the announcement, saying its offer represents an "ambitious, growth-oriented industrial project, which will be carried out in full respect of the commitments that Altice has undertaken with the French government". 

French economic development minister Arnaud Montebourg had earlier said he favoured the offer from Bouygues, in order to put an end to the price war in the French telecom market. However, a merger of Bouygues and SFR may have faced resistance from the French competition regulator and European Commission, reducing the market to three mobile networks from four and creating two dominant operators with over 40 percent market share each.