Numericable seen as favourite ahead of Vivendi board meeting - sources
* Vivendi is selling SFR telecom unit to focus more on media
* Numericable v. Bouygues in month-old takeover fight
* Vivendi board expected to vote Friday afternoon
By Leila Abboud and Sophie Sassard
PARIS/LONDON, April 4 (Reuters) - French cable operator Numericable is best placed to win a bidding war to buy Vivendi's telecom unit SFR ahead of a decisive board meeting on Friday afternoon, said two people familiar with the matter.
The 13 members of Vivendi's board are expected to vote on whether to finalise an accord to sell France's number 2 telecom operator to Numericable after three weeks of exclusive talks over the roughly 15 billion euro ($20.57 billion) deal.
Rival suitor Bouygues has been trying to get back into the running by raising the cash portion of an initial bid by 1.8 billion euros and bringing in outside investors, including a French state-backed fund.
But ahead of the board meeting, Vivendi remained concerned about the regulatory and execution risks of the Bouygues bid, which would cut France's mobile players to three from four, and was leaning towards sticking with Numericable since it offered a quicker exit from telecoms, the people said.
The situation could still evolve if one or both suitors altered their offers, the people added, and no final decision had been made.
Analysts had predicted that Numericable, and its parent company Altice backed by billionaire Patrick Drahi, would likely sweeten its bid to see off the Bouygues threat.
But two people close to Numericable said on Thursday night that although the group had made some modifications to the terms of its bid, it had not raised the 11.75 billion euros cash part or the 32 percent stake Vivendi would get in the merged company.
For its part, Bouygues on Thursday was searching for additional outside investors to back its bid and was in talks with France's Dassault family, said two other people.
Bouygues has given Vivendi the choice of two bids: 11.3 billion euros and a 43 percent stake in the new company, or 13.15 billion euros in cash and a 21.5 percent stake.
A Numericable spokesman declined to say on Friday whether any changes had been made to its bid, adding that backer Patrick Drahi was "calm" after three weeks of talks with Vivendi.
A Bouygues spokesman declined to comment.
The sale of SFR will reshape Europe's third-biggest telecoms market after two years of brutal price war brought on by the arrival of low-cost player Iliad to the mobile arena.
For Vivendi, a sale of SFR would cap a strategic overhaul that began in spring 2012, when veteran chairman Jean-Rene Fourtou declared there would be "no taboo" in re-examining the 160-year-old group's unwieldy holdings that ranged from video games to telecoms in Brazil.
Fourtou became convinced that Vivendi should exit telecoms, to focus more on its media businesses, after seeing the damage wrought by Iliad's Free Mobile service.
Once the group's cash cow, SFR began to drag down Vivendi's results and core operating profit halved from 2011 levels to 1.07 billion euros at the end of 2013. SFR still accounted for more than half of group sales and profits last year.
Fourtou, and deputy board chairman Vincent Bollore, see Vivendi's future in its pay-television unit Canal+, Universal Music Group and Brazilian broadband specialist GVT. They are expected to use some of the proceeds of the SFR sale to pay down debt and reward shareholders, while the rest would go to acquisitions to fulfil Vivendi's ambitions in media. ($1 = 0.7291 euros) (Additional reporting by Gwenaelle Barzic and Matthieu Protard; Editing by Stephen Coates)