* Would value SFR at around 15 bln euros - source
* Vivendi would keep 30 pct of merged company - source
(Recasts with confirmation of talks, context, shares)
By Leila Abboud and Gwénaëlle Barzic
PARIS, Feb 24 French media group Vivendi
confirmed on Monday it had been approached by cable
group Altice over a tie-up between mobile operator SFR
and cable firm Numericable, but said it had not yet
received any formal offer.
The proposal being discussed would value Vivendi unit SFR at
around 15 billion euros ($20.6 billion) and would see Vivendi
keep a stake of roughly 30 percent in the new company, a source
close to SFR told Reuters earlier. A second source cautioned
that it remained to be negotiated what proportion of the new
company the two sides would own.
A deal would accelerate Vivendi's exit from
capital-intensive telecoms as it tries to focus on pay-TV and
music, and would enable SFR to spend less on rolling out
high-speed fibre broadband in France by relying on Numericable's
Les Echos newspaper first reported on the talks on Sunday,
saying the parties aimed to reach a firm deal in a few weeks. It
would involve an issue of about 8 billion euros of debt, the
Analysts have estimated the potential financial benefits of
the pairing could be worth as much as 6 billion euros.
A Vivendi spokesman declined to comment beyond saying that
no memorandum of understanding had been signed for now. Both SFR
and Altice, the holding company of founder Patrick Drahi,
Numericable's largest shareholder, declined to comment.
A partial exit from SFR would cap a tumultuous period at
Vivendi, once Europe's biggest media and telecom conglomerate
built during an acquisition spree in the late 1990s.
The past two years have been a period of soul-searching for
the company after it came to realise its various businesses did
not make much sense together and Chairman Jean-Rene Fourtou lost
enthusiasm for the telecoms business.
With the arrival in late 2012 of Vincent Bollore on
Vivendi's board as the group's largest shareholder, the
strategic review has gathered pace. It agreed to sell its
second-biggest unit, Maroc Telecom, to Gulf operator
Etisalat last year. The divestment is expected to close soon.
Drahi, Numericable's largest shareholder, has made no secret
of his interest in a tie-up with SFR. The two sides held
unsuccessful discussions in late 2012 but Vivendi was
unconvinced by Drahi's proposal and price.
Since then, Drahi carried out initial public offerings of
both Numericable and Altice to bolster his financial firepower
and borrowing ability and to take another run at buying SFR.
SFR HIT BY PRICE WAR
Shares in Numericable were 4.3 percent higher at 30.74 euros
at 1225 GMT. Vivendi shares were up 1.3 percent.
"There should be significant synergies from such an
operation, namely with the migration of SFR fixed broadband
customers to Numericable's cable network," Espirito Santo
analysts wrote in a note.
A deal would allow SFR to use Numericable's lines into homes
rather than renting those of its rival Orange. The
tie-up would also lower the cost of rolling out high-speed
broadband fibre, something Numericable has already heavily
Vivendi's former cash generating machine, SFR has been
hammered by a price war started when rival Iliad
undercut it with its low-cost "Free Mobile" offer, forcing it to
spend money to try to keep clients.
Numericable, which listed on the stock market in November in
France's biggest initial public offering since 2009, had
previously been seen as a potential takeover target for SFR and
rival Bouygues Telecom.
Altice, which also owns French and Belgian cable companies
and mobile operations in Israel, listed on the stock exchange at
the end of January.
Built via a decade of acquisitions, Altice is surfing a wave
of investor interest in the European cable sector as a growing
number of consumers turn to those companies for television and
broadband at faster speeds and lower prices than from telecoms
($1 = 0.7275 euros)
(Writing by James Regan and Natalie Huet; editing by Eric Walsh
and Tom Pfeiffer)