Orange – Bouygues: the telecom sector holds its breath – Les Echos

The French telecom sector holding its breath. By late afternoon, 17 hours Orange and Bouygues must take each a board. On the menu: the proposed acquisition of the telecom subsidiary of the latter by the former. Still uncertainty about what could come out of these crucial meetings. Orange and Bouygues repeated for several weeks a decision on the future of Bouygues Telecom will be taken before March 31. But to date nothing says it will be definitive.

“A deadline has been set. But it is not close to two days, “cautions a source close to the negotiations. The outcome of the boards could lead to a simple observation on the project’s progress and the need to continue for some discussions. At Orange, in any case, administrators were warned that this was only an “information meeting, and she would not decisional,” says a source close to the matter.

In the opinion of many protagonists of the matter, nothing is settled yet. The Easter weekend was certainly studious. The staff states of the four operators were locked up for several days – and nights – in a large law firm to try to resolve the remaining problems.

Free resume 2,000 employees of Bouygues Telecom

Progress has been made on the asset allocation of Bouygues Telecom, while its acquisition by Orange necessarily require transfers to be approved by the competition Authority. For employees of Bouygues Telecom including being “settled”. As we reported on Monday Free have finally decided to take about 2,000 employees from its own stores of the operator. Free resume and about 300 shops Bouygues of a total of 550 (including franchise stores). SFR is meanwhile ready to recover 1,000 to 1,500 people, the balance (about 4,000 employees) would at Orange.

Beyond employees, Free and SFR will share other assets of Bouygues Telecom frequencies, networks, clients … In the end what will t- it Orange is still the buyer of the subsidiary of Bouygues? According to our information, the operator should keep a portion of fixed clients and mobile clients top market. Finally, Orange could have up to 50% of turnover.

Friction subjects still turn around and always valuing Bouygues Telecom. At Bercy, some consider that the price of 10 billion euros, inherited from the SFR takeover approach last year, and is the basis for negotiation since the early discussions, is too high, while the active weighs a little over 6 billion in the accounts of the parent company Bouygues. No matter outbreak of a debate around a “Adidas telecom” in a year of presidential …

Orange Valuation

in this final valuation depends on the participation of the construction group in the future Orange, and that of the State. Martin Bouygues has always said he wanted to recover between 10 and 15% stake in the incumbent operator. On the side of the state, which is the majority shareholder with 23% of the shares, no way to go below 20%.

The issue also turns on the valuation of Orange, while the operation should be partly financed by a capital increase. The state, where there is some disagreement over whether such a deal, campaigning to retain the highest possible price, in order to minimize dilution and therefore Bouygues group participation. The debates are very tight on the amount of the premium on the price of Orange. “There are still significant differences between the positions of each other on these issues. It could still take several days to find common ground, “warns an expert dossier.