Failure of negotiations between Orange and Bouygues Telecom – Le Figaro

INFO LE FIGARO – The two groups were announced on Friday evening the breakdown of negotiations. Involved, principally the refusal of Martin Bouygues to yield to the demands of the Orange State shareholder.

The acquisition of Bouygues Telecom Orange will not happen. After a final meeting earlier in the afternoon between Stéphane Richard CEO of Orange and his counterpart Martin Bouygues, the two groups met Friday night their respective boards of directors, for the third time in three days. They were, corroborating sources, endorse the project failure. It’s the end of three months of almost uninterrupted negotiations between the leaders of four French telecom operators, Bouygues Telecom, Orange, SFR and Numericable Iliad owns Free.

Ten days ago, however, the parties some were well have done the hard part. The division of Bouygues Telecom on the basis of a valuation of 10 billion euros, between Orange, SFR and Free was stopped and the prices of various assets accepted, not without difficulty, by the buyers. The operation, called “Jardiland” by many bankers and lawyers who worked there seemed so well underway. The aim was to conclude no later than March 31.

But the mechanical crank was Thursday, March 24, in the office of Emmanuel Macron in Bercy. The Minister of Economy and Martin Vial, the head of the Agence des participations de l’État (APE), which owns 23% with BPIfrance Orange capital, expressed three unacceptable demands by Martin Bouygues. They thus conditioning the entry of Bouygues in the capital of Orange at a floor price of 18.5 euros per share while the parties were negotiating until then to 17 euros (the share price was 15.40 euros on the stock exchange Friday). By increasing the price of Orange, Emmanuel Macron has automatically reduced the value of Bouygues of over 10%. Two other clauses remained in the throat of the businessman: the prohibition for 7 years for Bouygues to climb to the Orange capital, and a freeze on double voting rights for 10 years

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Martin Bouygues such requirements have reinforced the idea that the State was against joining the Orange capital. And from the Easter weekend, marked by three days of intensive negotiations, the decision was made not to sell two thirds of its assets in those conditions. Friendly pressures including the Elysée and Matignon to invite him to make an effort, have not varied, even as Bercy and the EPA have maintained their positions. There are a few more hours, Manuel Valls has asked to meet with the CEO of the Orange and Bouygues to attempt a final mediation. She will not take place.

With this failure, the battle between operators should flare. If customers can be welcomed, the companies and their employees may suffer because the margins are small and the very large investments. They also deprive 5 to 10 billion of additional margin to three years obtained through the transition from four to three operators.

But the Bouygues Telecom, Orange, SFR and Free are not the only losers. The state also. He did not will collect 1.3 billion euros in tax revenues on capital gains on disposals and rights of records related to the split sales of Bouygues Telecom.