French telecoms stocks soar amid takeover talk
Shares in leading French telecoms operators soared Monday, as one of the top players officially launched a takeover bid for a rival that would profoundly shake the sector.
The Altice group, owned by acquisition-hungry Franco-Israeli tycoon Patrick Drahi, announced an offer for Bouygues Telecom thought to be around 10 billion euros ($11.3 billion).
Bouygues Telecom confirmed it had received the "unsolicited" offer and said it would hold a meeting of its board on Tuesday to discuss the takeover bid.
"There is no negotiation underway," stressed Bouygues.
Neither company disclosed the actual value of the takeover offer.
But traders were jubilant at the prospect of consolidation in the French telecoms market and rushed to buy stock in both companies.
At the opening bell, Numericable-SFR, a subsidiary of the parent group Altice, was up more than 13 percent while Bouygues was up more than 14 percent.
Another player, Iliad -- which owns operator Free -- was also up by more than 10 percent.
The main French stock index, the CAC 40, was also in the black, up nearly three percent on optimism a deal could be found over Greece.
Altice said in its statement that it would likely resell some of the assets to Iliad/Free if the deal went ahead.
According to the Journal de Dimanche weekly, which broke news of the possible tie-up on Sunday, Free would get some of Bouygues's mobile frequency, antennas and shops, while some of its employees may end up at market leader Orange.
However, the French government immediately came out against the deal, with Economy Minister Emmanuel Macron saying: "Consolidation is currently undesirable for the sector."
"Now is not the time for opportunistic tie-ups which may be of interest to some people but which are not in the public interest," Macron told AFP.
"Jobs, investment and better customer service are the priority," added Macron, who noted that recent cases in Europe had shown telecoms mergers to have a "negative" impact.
© 2015 AFP