European cable group Altice has made an offer through its French subsidiary Numericable-SFR for Bouygues Telecom, the third-largest mobile provider in France.
Shares in Altice, which is controlled by billionaire Patrick Drahi, jumped more than 20 per cent after the announcement, bringing prices to €138.85 (£99.55) on Monday morning (June 22nd). Numericable-SFR also saw shares go up by 14.7 per cent.
Although details on the deal have not been made public, sources told the Financial Times that Numericable-SFR had offered more than €10 billion for the mobile operator.
Bouygues confirmed that it had received an unsolicited offer from Mr Drahi and said that the bid would be reviewed during a board meeting on Tuesday.
France's largest mobile provider
If the deal goes through, it would create France's largest mobile operator. It would also reduce the number of competitors from four to three. The country has experienced a three-year "war on prices," says the Financial Times – and this has made it difficult for businesses to invest in infrastructure.
Shares in other French Telecoms companies were up on Monday morning (June 22nd). Iliad saw shares go up more than 12 per cent, while Orange – the former state-owned monopoly and currently France's largest mobile operator – saw an eight per cent rise.
There may be obstacles for the deal, however, as the French government appears to oppose it.
A statement released on Sunday indicated that French economy minister Emmanuel Macron would not support a move that led to consolidation in the country's telecommunications sector.
Mr Macron explained: "Now is not the time for opportunistic tie-ups which may be of interest to some people but which are not in the public interest."
The French state is preparing to auction off six blocks of spectrum in a bid to raise at least €2.5 billion – and it is believed the price could rise quickly, depending on interest from mobile operators. A source told the Financial Times that Iliad would support Mr Drahi's move by agreeing to buy spectrum, as well as other assets, from Bouygues Telecom.
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