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Vivendi to examine Bouygues SFR offer: sources

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[March 28, 2014]  PARIS (Reuters)  Vivendi <VIV.PA> will examine the latest Bouygues <BOUY.PA> offer for its SFR telecoms subsidiary while respecting a three-week exclusivity period for talks with a rival bidder, two sources familiar with the matter said.

A sub-committee of Vivendi's board, which earlier evaluated the original two offers, is meeting once more on Thursday to discuss Bouygues' latest bid, the sources said.

The outcome of the battle to buy SFR, France's number-two mobile operator, will reshape the competitive landscape of Europe's third-biggest telecoms market after two years of price war touched off by the arrival of low-cost upstart Iliad's <ILD.PA> Free Mobile service.

Although Bouygues faces a high hurdle after raising its offer for SFR, given exclusivity had already been granted to rival Numericable <NUME.PA>, the construction-to-telecoms conglomerate sees a tie-up as key to saving its telecoms unit.

Bouygues's latest offer for SFR, which was submitted six days after Vivendi chose to start exclusive talks with Numericable, raised the cash portion of its offer by 1.85 billion euros ($2.55 billion) to 13.15 billion while cutting the stake Vivendi would hold in a combined SFR-Bouygues Telecom to 21.5 percent from 46 percent.

Bouygues Chairman Martin Bouygues has also sent a letter to Vivendi promising that if his company won the battle for SFR there would be no layoffs plan or voluntary-departure plan for three years following the signature of the deal agreement, according to the letter seen by Reuters.

While Numericable has also promised to rule out a layoffs plan for three years, its starting point is the end of the exclusivity period, or April 4, according to its own letter to Vivendi seen by Reuters.

Both bidders are keen to soothe government concerns over job cuts at a time of record unemployment in France.

Examining the Bouygues offer will be a sensitive task for Vivendi, which must respect the exclusivity granted to Numericable and avoid communication with Bouygues, the sources said.

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Cable group Numericable's bid includes 11.75 billion euros in cash and a 32 percent equity stake in a new merged company to be formed through the acquisition. Vivendi is in exclusive talks with Numericable until April 4.

A spokesman for Altice <ATCE.AS>, the holding company of Numericable's biggest shareholder Patrick Drahi, said: "During this period of exclusive talks between Vivendi and Numericable, we are continuing to work in a constructive and effective way."

Vivendi's entire board will meet on April 4 to make a decision on the sale.

Vivendi wants to exit telecoms  despite SFR bringing in nearly half of its revenue last year  to focus more on its media businesses, including pay-television and music.

A Vivendi spokesman declined to comment.

($1 = 0.7254 euros)

(Reporting by Leila Abboud and Gwenaelle Barzic; editing by Andrew Roche)

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