Bouygues SA share price down, increases the cash portion of its SFR offer to 20.6 billion dollars

Bouygues SA seems to be truly determined to win the battle for Vivendi SAs telecom unit SFR, because it once again increased its bid, which is now estimated to 15 billion euros (20.6 billion dollars). The company also made a statement, saying that after an eventual merger, a 10% stake would be received by Vivendi. In comparison, Altice proposed a 32% stake in the new company formed after a possible merger of Numericable with SFR.

Bouygues SA is trying to convince Vivendi to prefer it over its competitor Altice SA, which is the reason why the company is raising the cash portion of its bid for the third time just a few hours before the board meeting of Vivendi takes place. Bouygues added an extra 1.85 billion euros to its previous bid and now surpasses the offer of Altice SA by 3.25 billion euros. The company revealed that its latest bid, excluding potential cost savings and additional revenue, is estimated to 16 billion euros and could be increased to 16.5 billion euros in case an “earn-out clause” is included.

Since Altice was announced as the preferred bidder on March the 14th, the company and its division Numericable have started exclusive negotiations with Vivendi over the purchase of the SFR telephone unit. However, Bouygues proved to be determined to win this battle and raised its bid to make its offer more attractive.

One of the analysts, who work for Liberum Capital Ltd. – Mr. Ian Whittaker, commented the situation in an interview for Bloomberg: “This morning it seemed very much of a done deal. I don’t think that’s the case now. The extra cash has definitely changed the dynamics.”

People with knowledge of the process, who asked not to be identified, because the negotiations are not public, reported that Vivendi could still prefer Altice at the board meeting scheduled for today. The people also said that there are several case scenarios – it is possible for Vivendi to prolong the exclusivity period with Altice, start negotiations with Bouygues or even reopen the bidding process once again.

Bouygues SA fell by 0.73% to 30.42 euros per share by 12:09 GMT in Paris, marking a one-year change of +45.74%. The company has a market value of 9.78 billion euros. According to the Financial Times, the 13 analysts offering 12 month price targets for Bouygues SA have a median target of 30.50 euros, with a high estimate of 35.00 euros and a low estimate of 21.00 euros. The median estimate represents a -0.46% decrease from the previous close of 30.64 euros.