Altice offers to buy rest of SFR with its own shares
05 September 2016 | Alan Burkitt-Gray
Expanding French operator Altice is bidding to take over the 22.25% of SFR’s share that it does not already own. The company is proposing to replace them with newly issued shares in Altice.
Reuters valued the deal at €2.35 billion. The company is offering €24.72 per SFR share, a 2.6% premium on the closing price on Friday of €24.09.
At same time the company announced a new strategy which will bring all its subsidiaries into more unified control. CEO Michel Combes said: “Altice has been providing critical strategic and operational support to its subsidiaries enabling them to compete very successfully in their respective markets.”
Altice bought most of SFR from media group Vivendi in 2014 for €17 billion, to merge it with its Numericable cable business, and then offered Vivendi €3.9 billion early in 2015 for the group’s remaining 20% stake. SFR’s market capitalisation, based on the outstanding quoted shares, is €10.6 billion.
The offer, which has no minimum acceptance rate, needs the approval of French and Netherlands financial authorities.
Altice, which earlier this year bought the fourth largest cable operator in the US, Cablevision, says the deal will benefit SFR’s remaining shareholders by giving them a stake in “higher growth markets with structural and competitive advantages, particularly in the US”, and given then “exposure to significant efficiency potential at Altice US”.
The company accompanied the announcement by saying it wanted to strengthen its industrial and operational strategy “following its transformation into a leading transatlantic communications and media group with the closing of the acquisition of Cablevision”.
It added: “Altice plans to make its core strategic, operational and technical capabilities available to its subsidiaries in a more centralized manner to maximise the powerful impact on their operational and financial performance. Altice’s subsidiaries will benefit even more from the know-how, methodologies, best practices, processes and unique services of the Altice management team.”
“As we have significantly grown in size and invested into new markets over the last two years, we are focused on ensuring that the entrepreneurial, innovative DNA and operational excellence at the core of the Altice model continue to benefit our businesses in the most optimal manner while taking full advantage of the global scale of the group,” said Combes.
“Our updated strategy will significantly strengthen our subsidiaries and put them into an even better competitive position to provide our customers with best-in-class services across all of our markets.”
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