France's TDF wants final bids by November-sources

Mon Sep 16, 2013 8:45am EDT

PARIS, Sept 16 (Reuters) - International broadcasting masts operator TDF Group is to ask prospective buyers of its French division to submit binding offers by early November, in a deal that it hopes will fetch at least 4 billion euros ($5.3 billion), three people close to the situation said.

Paris-based TDF, which provides radio transmission services for broadcasting and telecoms companies, received expressions of interest from multiple bidders in August that fell short of its targeted price tag, sources with knowledge of the process earlier told Reuters.

Two bidders remain in the race as of now, said two of the sources, a consortium led by Canada's PSP Capital Inc. and another led by a Hong Kong-based investor.

Other potential bidders, including American Tower and Crown Castle have dropped out of the running, one of the sources said. BNP Paribas-backed infrastructure fund Antin was not allowed to bid because of conflicts after it bought masts from Bouygues, France's third-biggest mobile telecoms network operator, last year.

"We will ask for firm offers by early November with the aim of closing the deal in the first quarter of next year," said one of the sources.

TDF owns television and radio masts, as well as satellite and internet operations.

Private equity fund TPG is TDF's largest shareholder with 42 percent of the equity, followed by France's national investment fund FSI and fellow private equity funds AXA and Charterhouse.

A combination of the financial crisis and setbacks in technological advances has marred TDF's prospects since it was bought in 2006, and its private-equity owners are now seeking to exit.

People close to the company have previously said that its owners would not sell the French business for less than 4 billion euros, which they see as a low-end valuation assuming earnings before interest, tax, depreciation and amortisation (EBITDA) improved to about 380 million euros in 2014 and applying sector price multiples of 10.5-11.5 times EBITDA.

That price tag would allow TDF to repay its 3.8 billion in debt and avoid a restructuring.

However people on the other side of the negotiation table are less bullish on forecast EBITDA and tend to apply multiples of between 8 and 10, they said.

"TPG has never hid the fact that the price is 4 billion euros," said one of the sources. "If not they won't sell."

Another one of the sources added: "The outcome is really unclear. It could very well fall apart because TPG is very stubborn on numbers."

TDF declined to comment on Monday, while no one at its biggest shareholder, TPG, was available for comment.

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