Fellow tycoon Martin Bouygues, whose conglomerate has telecoms to
construction holdings in France, mounted a late bid for SFR against
Drahi's Numericable <NUME.PA> and rallied strong connections in the
Xavier Niel, founder of low-cost operator Iliad <ILD.PA> who would
benefit if a rival bid from Bouygues <BOUY.PA> succeeded, slammed
Drahi for skirting taxes with his company based in Amsterdam and
homes in Geneva and Tel Aviv.
On Friday as Vivendi's board prepared to weigh the bids, France's
Industry Minister Arnaud Montebourg went on morning radio to slam
Drahi's bid as too leveraged and bad for France.
Through the three-week takeover battle, Drahi, who came to France
from Morocco as a teenager, was not deterred.
On Friday Vivendi picked Drahi's Numericable bid of 11.75 billion
euros ($16.36 billion) in cash and additional shares over that of
Bouygues. The two sides will undertake three weeks of exclusive
talks to finalize the deal.
Working with a handful of lieutenants, who have helped him build an
empire of cable and television companies from the Dominican Republic
to Belgium, Drahi deliberately kept a low profile. He met with
regulators and ministers to explain his plan for SFR, France's
second-biggest telecom carrier and employer of 9,000, and ignored
the media hubbub.
"Patrick has been working on this project for years," said
Numericable executive Jerome Yomtov. "He was very calm."
A person who worked with him for years commended Drahi on the SFR
achievement: "This is somebody who is not from the French
establishment, who had to have an enormous amount of determination
to get where he is now."
FRENCH 'CABLE COWBOY'
Born in Casablanca, Morocco, Drahi moved to southern France at age
15 with his parents who were mathematics teachers. He soon
distinguished himself as a science student, and was selected for the
elite military university which specialized in math and engineering,
the Ecole Polytechnique.
There he rubbed shoulders with old French family scions and donned a
military uniform at Bastille Day parades. It was his first exposure
to the French establishment whose codes and traditions he eventually
learned to master.
His first job was at consumer electronics conglomerate Philips in a
lab working on fiber optics, but Drahi soon set out to be an
entrepreneur in the nascent cable sector.
With the backing of an American partner, he went town to town in
southern France lobbying mayors to convince them to let him dig up
their streets to install cable lines to deliver television. He
focused on areas left out of France's state cable program and soon
built up a patchwork of networks.
Eventually Drahi sold his company to UPC, a U.S. cable giant owned by his idol billionaire John C. Malone, the so-called "Cable
Cowboy" who built up a telecommunications empire in the early 1970s.
He shrewdly asked to be paid in shares of UPC and at age 34 went to
Geneva to work for UPC. He settled there with his wife. They have
four children, scattered today in Lausanne, Tel Aviv, and Bristol.
Drahi gathers them in Geneva each Friday for family dinner.
[to top of second column]
Just before the dotcom bubble burst, Drahi sold his UPC shares for
about 40 million euros and left the company.
In 2001 he created Altice <ATCE.AS>, an Amsterdam-based holding
company, and started buying up cable companies in France, Belgium,
and Luxembourg, slowly gaining critical mass.
Numericable was born at this time, and eventually grew to become
France's biggest cable company with a network covering two-thirds of
Drahi brought in private equity funds Carlyle <CG.O> and Cinven <CINV.UL>
to help fund Numericable's development. The company had its ups and
downs — saddled with high debts it was slower to upgrade its network
to deliver high-speed broadband than cable peers in Germany and
Britain and around 2002 faced a torrent of customer complaints for
poor service and billing errors.
Once Numericable was back on the rails, Drahi began to hunt for
acquisitions in cable outside France. His first buy was a cable
company in Israel called HOT. The country soon became a second home
for Drahi, who is well-known in business circles and an active
philanthropist there. In 2013 he branched into content by founding
I24, an international news channel broadcast in English, French and
The battle for SFR brought Drahi back to France. He first approached
Vivendi about SFR in 2012, but was rebuffed over disagreements about
price. He then pursued stock market listings of Numericable and
Altice with the aim of making another run at SFR.
At home in France he encountered obstacles he did not face
elsewhere. As the pressure mounted in the SFR fight, people close to
Drahi acknowledge that the criticism got to him and left him feeling
like an outsider.
Bernard Mourad, an investment banker at Morgan Stanley who worked on
the Numericable deal, said Drahi told his team to keep their heads
"He told us to keep working," said Mourad. "He did not want us to
use the methods used by some of our competitors."
($1 = 0.7181 Euros)
(Additional reporting by Tova Cohen;
editing by Elaine Hardcastle)
[© 2014 Thomson Reuters. All rights
Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.