PARIS French conglomerate Bouygues turned up the heat in its battle for control of Vivendi's telecom unit SFR on Tuesday by extending its offer to April 25 from April 8 and presenting a 500 million euro ($689 million) break-up fee.
Bouygues is seeking to muscle its way back into the running for SFR despite Vivendi being in exclusive talks with cable group Numericable until Friday.
To that end, Bouygues last week increased the cash portion of its bid by 1.85 billion euros to 13.15 billion euros and offered Vivendi a 21.5 percent stake in the new entity, instead of 43 percent under its previous proposal.
Altice, the parent company of Numericable, is now debating whether to raise the cash portion of its offer to match Bouygues, ahead of a decisive board meeting set for Friday, said a person close to the situation.
Its current bid includes 11.75 billion euros in cash and a would leave Vivendi with a 32 percent stake in a new merged company. The cash portion of Numericable's bid will be financed via 8.35 billion euros in debt and a 3.4 billion euro capital increase, which parent Altice will subscribe at 75 percent, sources earlier said.
In a note published on Tuesday, Barclays analysts wrote that Bouygues latest offer "will likely mean that Numericable/Altice have to increase their cash proportion too".
"With debt already significant, an adjustment to the capital raise appears inevitable to us," the analysts wrote.
A spokesman for Altice, the holding company of Numericable's biggest shareholder Patrick Drahi, declined to comment on Tuesday evening while Vivendi earlier declined to comment.
Bouygues said the break-up fee was payable should regulatory authorities refuse to approve its takeover - a key question mark over its takeover proposal which would cut the number of France's mobile operators to three from four.
Sources told Reuters about the inclusion of the break-up fee on March 26.
Official confirmation of the fee's existence follows a call on Friday from markets watchdog AMF for more transparency from all parties.
($1 = 0.7256 Euros)
(Additional reporting by Maya Nikolaeva, Cyril Altmeyer and Andrew Callus; Editing by Leigh Thomas and William Hardy)