(Adds Vivendi chairman comments)
PARIS, April 6 French cable company Numericable
is to launch a rights issue worth up to 4.7 billion
euros ($6.44 billion) to help fund its acquisition of Vivendi's
SFR, it said in a statement on Sunday.
Numericable won a fierce month-long bidding war against
mobile rival Bouygues for SFR on Saturday when Vivendi
announced it had decided to go with Numericable's offer, which
comprises 13.5 billion euros in cash, a 20 percent stake in the
combined entity and a potential milestone payment.
The takeover promises to reshape Europe's third-biggest
telecoms market after two years of brutal price competition
brought on by the arrival of low-cost rival Iliad into
the mobile arena.
It also completes Vivendi's drive to sell assets in order to
shift more towards media, leaving it with a 5 billion-euro cash
pile, some of which will be returned to shareholders via a
special dividend or share buyback, Vivendi's chairman told
newspaper Les Echos.
Following Numericable's rights issue, which will be
guaranteed by the holding company of Numericable's billionaire
backer Patrick Drahi, the remainder of the cash payout to
Vivendi - up to 8.8 billion euros - will be backed by debt
financing, Numericable said.
Drahi and other executives will give more details at a news
conference on Monday, the statement said. Drahi's company Altice
will own 60 percent of the combined entity with
Vivendi owning 20 percent and the remainder floated on the stock
Private equity firms Cinven and Carlyle have agreed to
exchange their combined holdings of 35 percent in Numericable
for cash and shares in Altice, Numericable said.
Vivendi said on Saturday it had picked Numericable as the
better bid in terms of business logic, commitment to preserving
jobs, chances of regulatory approval and long-term value.
Even though Bouygues later insisted that it had made the
more serious guarantees on preserving jobs - a top priority for
the French government at a time of record unemployment -
Vivendi's chairman told Les Echos that the overlap with SFR
would have been too great for a Bouygues deal to work.
"A tie-up with Bouygues would have created a group with a
mobile market share of 47 percent, which would have been
untenable in terms of competition," Jean-Rene Fourtou said in an
interview published on Les Echos' website on Sunday evening.
"The situation would have been difficult to manage, even
though Bouygues had promised not to lay anybody off for three
years ... We could not allow our staff to embark on a project
knowing that there would be one-third too many employees."
Fourtou added that Vivendi's restructuring was now complete
and that assets such as Brazilian telecoms operator GVT would
stay with the company.
Vivendi will make clear its plan to return capital to
shareholders when it publishes the agenda for its annual
shareholder assembly on June 24, Fourtou said.
($1 = 0.7303 Euros)
(Reporting by Lionel Laurent; Editing by Robin Pomeroy)