Numericable Rises On SFR Purchase Hopes

PARIS (The Deal) -- Shares in French cable company Numericable Group climbed sharply on Monday following a report that controlling shareholder Altice has struck a tentative deal to buy a 50% stake in Vivendi's Societe Francaise de Radiotelephone, or SFR, that would value the mobile and Internet services provider at more than 15 billion euros ($21 billion).

The board of Vivendi met on Friday to review the outlines of a deal and gave SFR CEO Jean-Yves Charlier a mandate to negotiate a transaction that, if successful, would lead to SFR's combination with Numericable, French financial daily Les Echos reported on Sunday without citing its source.

"There is no MOU [memorandum of understanding] in place or signed," Vivendi spokeswoman Anushka Mathew said Monday. She declined to say if talks were ongoing. Altice and Numericable did not return calls asking for comment.

The combination of Numericable, which provides high-speed Internet access, and SFR, France's No. 2 mobile phone company, has been the subject of speculation for years. The two companies held early-stage talks about a deal last year before abandoning negotiations because of disagreements over valuation. Numericable effectively removed questions about its own worth in November, when it launched an initial public offering that valued the group at about 5.6 billion euros including about 3 billion euros of debt. Its market capitalization has since climbed to about 3.78 billion euros.

Altice, which is controlled by French telecom's entrepreneur Patrick Drahi, boosted its firepower earlier this year when it sold about 1 billion euros of new stock in a January IPO that valued the owner of telecoms assets across Western Europe and the Caribbean at about 9.4 billion euros, including 3.64 billion euros of debt. Altice owns a third of Numericable.

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