Bouygues Improves Offer for Vivendi's SFR -- Update

By Sam Schechner and Ruth Bender 

PARIS-- Bouygues SA said Thursday it has improved its offer for Vivendi SA's phone unit, reopening a bidding war that had appeared closed when Vivendi selected a rival offer nearly a week ago.

Bouygues said it was improving the cash component of its offer to EUR13.15 billion, from EUR11.3 billion previously, as part of a proposal to merge SFR with Bouygues's telecom unit.

The new offer marks a surprising twist in the race for SFR and could complicate Vivendi's decision. Vivendi said last Friday that it had decided to enter exclusive talks with cable holding company Altice SA, rather than Bouygues, for the sale of the unit. It said the exclusive talks would last three weeks.

Spokesmen for both Vivendi and Altice declined to comment on the new offer. "We are in exclusive talks with Altice," said a spokesman for Vivendi.

Under Bouygues's new offer, the percentage Vivendi would hold in a new ensemble created by merging Bouygues Telecom and SFR, would be much lower than in its previous offer. Vivendi would hold 21.5% in the new group, Bouygues said. It previously had offered Vivendi a 43% stake.

The battle for SFR has pitted Altice's controlling shareholder, Patrick Drahi, against Bouygues chairman and chief executive, Martin Bouygues, who has lobbied hard for a deal that many analysts considered crucial to the survival of his telecom unit.

Bouygues SA, one of France's most prominent family-controlled companies, has garnered fresh support from others too, including the Pinault family and state-controlled Caisse des Dépôts et Consignations.

Write to Sam Schechner at [e-mail] and Ruth Bender at [e-mail]

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