Numericable May Launch Takeover Bid for France's SFR
The French cable TV operator, Numericable is reportedly preparing an offer to buy the French mobile network, SFR from its indebted parent company, Vivendi.
Citing unnamed sources, the French television channel BFM Business made the report saying that merger talks between Numericable and Vivendi have stalled, leading to the possibility of a full bid offer.
Numericable is owned by the private equity groups, Carlyle, Cinven and Patrick Drahi.
Although SFR is valued at around three-times that of Numericable, the cable company was originally expected to raise its holding in the larger firm through a payment of EUR4-5 billion to Vivendi, giving the two firms about half each.
The merged company would look to drive cost savings of around EUR1 billion per year, in a market which is in the midst of a price war following the launch of the low-cost Free Mobile network.
However, a spokesman for Vivendi repeated that "SFR is not for sale." and is looking at other options to cut costs in the increasingly competitive marketplace.
A sale of the company would also result in a serious paper loss as the valuation of all the mobile networks has fallen over the past year due to the local market conditions. Vodafone sold its 44% stake in SFR to Vivendi for US$11 billion just before the market has shaken up.
Vivendi is looking to sell some assets to pay down its debt following the ouster of its CEO last year.
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