Bouygues SA announced that it has upgraded its offer for Vivendi SAs SFR telecom unit. This move restarted the fierce bidding war with Altice SA that seemed to have been finalized after Vivendi chose the competitive offer less than a week ago.
The new proposition is said to be able to make the decision for Vivendi, which is looking forward to focusing exclusively on media and content assets, more complicated. Last Friday Vivendi SA revealed that it had made a decision to start exclusive negotiations with Bouyguess rival Altice SA, which was considered the end of the bidding war.
However, Bouygues SA has entered the competition once again. A person with knowledge of the companys new bid commented for the Wall Strreet Journal: “We decided to throw a stone in the water. We think it will be hard to ignore.”
Bouygues SA made an official statement revealing that it has raised the cash component of its offer by 1.85 billion euros. The company also said that France would be pulled as a shareholder in the proposed merger, if accepted by Vivendi. Bouygues SA said in the statement that its new offer is estimated to a total of 16.3 billion euros, including 13.15 billion euros in cash.
Part of the companys statement was cited by Bloomberg: “An IPO of the new entity is planned as soon as the merger is completed, thus giving Vivendi an immediate opportunity to monetize the remainder of its interest.”
The latest bid of Bouygues once again brings up the question of who will get Vivendi SAs phone unit, becoming the second-largest phone company in France.
One of the analysts, who work for Sanford C. Bernstein – Mr. Claudio Aspesi – commented the situation for Bloomberg: “Vivendi’s board will have to at least take a look at the new Bouygues offer. Still, Vivendi chose Numericable for various reasons, not just price – it’s hard to predict how much influence this will have on its final decision.”
Bouygues SA fell by 0.95% in Paris by 11:44 GMT to trade at 30.37 euros, marking a one-year change of +35.44%. The company is valued at 9.79 billion euros. According to the Financial Times, the 13 analysts offering 12-month price targets for Bouygues SA have a median target of 29.00 euros, with a high estimate of 35.00 euros and a low estimate of 21.00 euros. The median estimate represents a -5.41% decrease from the previous close of 30.66 euros.
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