Among stocks moving on corporate news today, SFR Group SA jumped 6.8 per cent after Patrick Drahi’s Altice NV agreed to buy the 22 per cent of the company that it didn’t already own for €2.4 billion (RM10.9 billion).
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This amounts to Altice offering €2.4 billion or a 2.6 percent premium on the closing price of SFR’s shares on Friday.
“The terms of the proposed transaction have been unanimously approved by the board of directors of Altice”, said Altice.
Altice said last month that SFR’s profitability deteriorated in the first half as competition heated up again in the French telecoms market after recent attempts to consolidate the mobile telephone industry, reducing the number of operators to three from four, petered out.
“We believe SFR shareholders give away part of their upside to Altice in exchange for higher liquidity, diversification into higher growth markets and increased weighting of cable assets”, ING said in a note.
The deal is subject to approval from France’s Autorité des Marchés Financiers (AMF), and is expected to close in the fourth quarter of 2016.
Amsterdam-listed Altice offered eight of its own shares, which closed at 15.45 euros on Friday, in exchange for five SFR shares, which ended at EUR24.09.
Technical core areas identified include improving network quality through upgrades and new build, improving customer relationship management through a focus on efficient IT platforms, digitisation and simplifying processes, delivering key technology services and R & D through Portugal-based Altice Labs, developing new products, services and business models, including convergent services delivered via home hubs, and branding and marketing synergies.
To boot, it revealed plans to launch Altice Studios, which will create original movies and series, and Altice Channel Factory, to create new, unspecified channels.
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“Our updated strategy will significantly strengthen our subsidiaries and put them into an even better competitive position to provide our customers with best-in-class services across all of our markets”, said Altice CEO Michel Combes.
