* Bouygues raises cash part of SFR bid by 800 mln euros
* Numericable improves its bid - sources
* Vivendi board meeting set for Friday
(Adds Numericable improved bid, analyst comments, shares)
By Gwénaëlle Barzic, Sophie Sassard and Leila Abboud
PARIS, March 13 French groups Bouygues
and Numericable have both improved the terms of their
bids for Vivendi's telecoms unit SFR, ahead of a
decision by the seller on Friday that will reshape the country's
Construction-to-telecoms conglomerate Bouygues said on
Thursday it would raise the cash portion of its bid to 11.3
billion euros ($15.7 billion) from 10.5 billion, while cutting
the stake Vivendi would be left with in a combined SFR-Bouygues
to 43 percent from 46 percent.
Cable firm Numericable also improved its offer, said two
people with direct knowledge of the matter.
Three other people close to the situation, but without
direct knowledge of the Numericable bid, said they had learned
that the company had raised the cash portion of its bid by as
much as 850 million euros.
Numericable, whose previous bid was 10.9 billion euros in
cash and a 32 percent stake in the combined group, declined to
comment. Vivendi also declined to comment.
The jockeying shows how Vivendi's hand has strengthened in
recent weeks as SFR's suitors circle. The conglomerate had
planned to spin off SFR this summer as part of two-year effort
to exit telecoms and focus on its media businesses.
Both deals would change the landscape in Europe's
third-biggest telecom market that has been in a price war since
low-cost operator Iliad entered the mobile arena in
A Numericable win would create a major player in fixed
broadband, while victory for Bouygues would cut the number of
mobile operators to three from four, potentially leading to
Vivendi's board will meet on Friday morning to debate the
two bids, as well as the spin off option.
Before the new bids, the race was "very close" and internal
talks were ongoing, Vivendi insiders had said.
The amount of cash offered by the buyers and Vivendi's
ability to make a quicker and more complete exit from SFR are
crucial factors in the bid battle, according to people familiar
with the situation.
A tie-up with Bouygues would slow Vivendi's departure from
telecoms somewhat because the regulatory review would be longer
than that for Numericable, since the latter is not a big player
Also, Bouygues needs to do an initial public offering (IPO)
of the new company - aiming for mid-2015 - before Vivendi could
sell its remaining stake on the open market, whereas Numericable
shares are already floated.
Political factors could also intrude since the French
government has already said it would monitor the SFR sale to
ensure that jobs were protected and operators kept their
promises to invest in high-speed broadband.
Industry Minister Arnaud Montebourg has declared publicly
that he prefers the Bouygues bid because it would calm what he
called "destructive competition" in France.
In a statement on Thursday, Bouygues said it was "committed
to facilitate the liquidity of Vivendi's interest in the new
entity." A spokesman said that meant Vivendi might be allowed to
sell part of its 43 percent stake to financial investors before
a new Bouygues-SFR was launched on the stock market in an IPO.
Vivendi's right to sell 15 percent at IPO - as outlined in
its original offer - was unchanged. Taken together, the various
measures offered by Bouygues would allow Vivendi to sell down
its entire SFR stake within three years, said the spokesman.
Patrick Drahi, entrepreneur and founder of Numericable, had
said in an interview published on Wednesday that he would not
change his offer for SFR.
Numericable shares were up almost 7 percent at 1422 GMT,
while Bouygues' were largely flat, and Vivendi's down 1 percent.
Yves Marcais, a broker at Global Equities, said he expected
Vivendi to weigh the bids objectively, adding Vincent Bollore,
the group's vice-chairman and second-largest shareholder, would
likely have a big influence on the decision.
"Bollore is a practical man and he will not hesitate to
choose the best solution on the financial front," Marcais said.
($1 = 0.7192 Euros)
(Reporting by Gwenaelle Barzic and Andrew Callus; Editing by
Natalie Huet and Mark Potter)