2023-10-21 05:30:00
Patrick Drahi is now considering all solutions to reduce the mountain of debt that is currently shaking Altice, his telecoms and media group. Including, as he said at the beginning of September during a conference in London, to sell part of the capital of his most valuable asset in Europe, namely the operator SFR. The billionaire and his staff are working behind the scenes, sounding out his rivals regarding the possibility of consolidation. According to our information, they contacted Free this summer to discuss the subject. The objective was to assess the feasibility of a merger between the two operators. There was not, a priori, a direct question of a complete and outright sale of SFR.
Also according to information, similar discussions recently took place with Bouygues. They also related to a merger with its subsidiary Bouygues Telecom. And this through Vincent Le Stradic, managing partner at the investment bank Lazard, who was mandated by Altice to find the 3 billion euros that the group needs to reduce its debt. His job: to tour operators and investment funds.
Reluctance of Free and Bouygues
On these occasions, Free and Bouygues did not, according to our sources, show any interest. Asked by The Tribune, SFR, Bouygues and Free refuse to comment. Also contacted, Vincent Le Stradic has not responded, for the moment, to our requests. Several reasons can explain the reluctance of both Free and Bouygues. There is, on the one hand, the situation of SFR, which is losing a lot of customers and is in the red commercially. Its valuation by Patrick Drahi may also pose a problem, as can the 24 billion euros in debt of Altice France, its parent company.
The vast corruption scandal in which Altice became mired this summer is certainly not reassuring either. Since July 13, Portuguese justice has suspected Armando Pereira, associate and old companion of Patrick Drahi, as well as several executives of the group, of having imposed a network of dubious suppliers in different Altice subsidiaries, and of having unduly taken significant sums.
Bad timing
The timing of a consolidation is also, very probably, not the right one. Such an operation, synonymous with a return to three operators, would necessarily have to have the green light from the competition authorities and Brussels. Until now, the European Commission has been very reluctant to this type of deal. All French telecoms players are waiting to know what fate Brussels reserves for the proposed marriage between Orange and MasMovil in Spain. If this merger ends up winning the blessing of the commission, this will perhaps open the door to prospects of consolidation in France…
It would not be surprising if Orange was also approached by Patrick Drahi, his bankers or his lieutenants. Asked by The Tribune, the historic operator does not comment. If there is to be a consolidation project, Orange’s participation would certainly be necessary to recover certain assets. The fact remains that a merger between Orange, the French telecoms leader, and SFR, its runner-up, appears impossible as it stands, given the colossal market share they would hold together. The fact that Altice is so active on the consolidation front is not surprising. Patrick Drahi is currently looking for cash to reduce his debt and postpone a repayment deadline of 1.6 billion euros to 2025. A prospect of consolidation would, of course, be likely to reassure investors, and encourage them, above all, to to take out the checkbook.
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#Altice #SFR #approached #Bouygues #Free
