Bouygues’ board on Tuesday unanimously rejected Altice’s unsolicited bid to acquire Bouygues Telecom.
Bouygues insisted its telco arm is well-positioned to continue competing on its own and cited a number of risks that come with Altice’s offer as reasons for the rebuff. The telco makes its reasons clear, but they could also be seen as an attempt to attract a higher bid from Altice.
Altice on Monday made an offer for Bouygues Telecom with a view to merging it with its Numericable SFR arm. Neither party disclosed the value of the proposed transaction, but sources cited in a Wall Street Journal report said it is worth €10 billion.
"The telecoms market is at the dawn of a new era of growth driven by the exponential development of digital uses. The board believes that Bouygues Telecom is particularly well positioned to take advantage of this growth," said Bouygues, highlighting its portfolio of frequencies, its 4G network, its growing fixed broadband base, and the launch of its Android TV service.
Altice’s offer also carries a significant risk due to the likely intervention by competition authorities, said Bouygues, and that the offer does not provide "a fully satisfactory response regarding this important matter."
The offer also does not consider the imminent launch of France’s 700 MHz auction and its consequences for the merger, Bouygues said.
Indeed, French telco regulator Arcep last week set a €2.5 billion reserve price on the spectrum in the 700 MHz, 800 MHz, and 900 MHz bands it is due to sell off in the fourth quarter. It has also set a 2 x 15 MHz cap on the amount of 700-MHz spectrum any single operator can win.
The participation or otherwise of Bouygues Telecom in the auction and the potential consequences it could have on its competitive position would need to be taken into account.
In addition, Bouygues warned that a takeover by Altice could put jobs at risk.
"The Bouygues group has always strived to write an industrial story that creates value in the long term with its employees and suppliers," the conglomerate said.
