PARIS, March 6 Bouygues set the value of its bid for larger telecom rival SFR at 19 billion euros ($26 billion)on Thursday and said it would raise extra capital for the business on completion of a deal by spinning it off into a new listed company.
Vivendi, SFR's owner, would be given 10.5 billion euro in cash and 46 percent of the new entity - valuing SFR at 14.5 billion euros before synergies and 19 billion after synergies, Bouygues said.
Bouygues estimates that the net present value of the synergies from the deal would be 10 billion euros, with 80 percent coming from operational costs and 20 percent from network investments.
After the spinoff, Bouygues would remain the core shareholder with 49 percent.
At the time of the IPO, Vivendi would be offered the opportunity to monetise a further 15 percent of the capital of the business. "Vivendi will then be free to sell its remaining interest when it sees fit to do so," Bouygues said
Bouygues is in a bidding war for SFR with French cable operator Numericable, which made a bid sources said was around 14.75 billion euros in cash and leaving Vivendi with a roughly 32 percent stake in the new group.
Vivendi is expected to review the offers in the coming weeks before deciding whether to sell SFR outright or move ahead with a planned spin off of the unit. ($1 = 0.7278 Euros) (Reporting by Leila Abboud; Editing by Andrew Callus)