RLPC-Bankers prepare up to 12 bln euros of debt for SFR buyout

LONDON/PARIS, March 5 Wed Mar 5, 2014 12:11pm EST

LONDON/PARIS, March 5 (Reuters) - Bankers are working on debt financing packages totalling up to 12 billion euros ($16.49 billion) to back cable firm Numericable's bid for French telecom operator SFR, banking sources said on Wednesday.

French media group Vivendi confirmed last Monday that it had been approached by cable group Altice over a tie-up. Altice is the holding company of founder Patrick Drahi, Numericable's largest shareholder. Numericable declined to comment.

The banks that have agreed to take part in the financing package include Bank of America Merrill Lynch, Barclays, BNP Paribas, Credit Agricole, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan and Morgan Stanley.

Numericable's bid, which is due to be submitted ahead of Vivendi's 1900 GMT deadline today, offers 14.75 billion euros in cash and shares for SFR. Vivendi would keep a stake of 32 percent in the new company.

Bankers are putting together a debt financing together of roughly 10-12 billion euros to back the buyout and it would include a mix of loans and bonds denominated in euros and dollars, the sources said.

"It would be a huge debt financing of around 10-12 billion euros and all markets would need to be tapped for liquidity," one of the sources said.

In addition to Numericable, France's third-biggest telecom operator Bouygues will submit an offer on Wednesday to buy SFR, two people close to the situation said on Tuesday.

Bouygues' bid will be financed with cash, debt, and shares in the newly combined company, and will not require a capital increase, said two people close to the situation.

If Vivendi does not sell SFR, then it will go ahead with its earlier announced plan to spin-off SFR as a separate unit this summer. It is lining up around 7 billion euros of loans to support a demerger, banking sources said.

The demerger plan would need to be approved at Vivendi's annual shareholder meeting on June 24.

Vivendi has cut its net debt after it sold 85 percent of its stake in video games maker Activision Blizzard in October for $8.2 billion. The sale of a 53 percent stake in Maroc Telecom to the UAE's Etisalat for 4.2 billion euros, which is set to close in the second quarter could also allow the group to reduce debt.

Factoring in the sales, Vivendi's net debt is around 7.2 billion euros as opposed to 13.4 billion euros at the end 2012. ($1 = 0.7277 euros) (Additional reporting by Alasdair Reilly and Matthieu Protard, editing by Louise Heavens)