France: Bouygues turns up pressure on Orange

Bouygues SA turned up the pressure in the talks to sell its mobile-phone division to Orange SA, demanding an initial stake of at least 10 percent in its bigger rival and saying there’s a 50 percent chance the deal won’t happen.

A holding of 10 percent to 15 percent in Orange “would be fine,” but anything less would be rejected, Chief Executive Officer Martin Bouygues told reporters at press conference in Paris on Wednesday. The deal is valued at as much as 10 billion euros.

“If we don’t reach a win-win deal for all, we’ll pursue our standalone strategy,” the executive said after the French construction and telecoms group reported better-than-estimated profit for 2015. “I’m interested in having a stake in Orange’s capital to benefit from future value creation in France and abroad.”

In a subsequent statement, Bouygues said it ultimately wants to end up with a 15 percent stake in Orange. It also said that the 10 percent to 15 percent stake only referred to what it might obtain via a capital increase of Orange to limit the government’s dilution of its stake in the former telephone monopoly, and that it would buy the balance required to reach 15 percent of Orange on open market.

Talks with Orange need to be completed by the end of March to limit disruption to clients, employees and the market itself, Bouygues said. Faced with a price war in the French mobile-phone and Internet market, he opted to negotiate the sale of Bouygues Telecom to Orange in exchange for cash and shares.

Full content: Gulf Times

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