Orange Bouygues: there was too much noise on the line – The Point

The suspense. After three months of negotiations and an interview last chance this afternoon between Martin Bouygues and Stéphane Richard, Bouygues boards and Orange, which took place late Friday afternoon, were officially recorded in the late negotiations. Orange will not call Bouygues. Anyway, not now … But there is still a fortnight, Stéphane Richard, CEO of Orange, which the state is the majority shareholder with 23% stake, said that the talks were “on nearing completion. “This deal has mobilized for weeks everything can be found heads well done in the world of lawyers and bankers in Paris. Gregory Chertok (Rothschild) and Jean-Michel Darrois (cabinet Darrois Villey Maillot Brochier) for Bouygues, bankers Jean-Marie Messier and Erik Maris for Orange. They worked days, nights and weekends, notably Easter, but the views were too incompatible.

It all started with a report by Bloomberg on 7 December 2015, revealing that Orange had started talks to buy Bouygues Telecom. On January 5, the two companies confirmed the information. The architecture of this transaction, which would have made from 4 through 3 as operators in France, was by nature and from the outset, very complex. First to competition issues. Orange is the first operator of French telecoms, could not simply buy the assets of Bouygues Telecom. To prevent abuse of dominant position and pass the test of the Competition Authority, it was therefore necessary to provide a scheme of disposal of the assets of Bouygues Telecom with two other industry players, Free and SFR. A big Meccano telecom was therefore the program. Antennas, frequencies shops have fallen into the hands of Free, subscribers to the fixed and mobile in the SFR, etc. But it seems that even if they were highly complicated, these issues were being resolved …

Martin Bouygues too greedy?

In fact, what seems to have made “derail” the deal, this is the price and weight of Bouygues in the post-redemption incumbent. Martin Bouygues is not the man to yield easily and … Economy Minister Emmanuel Macron either. Martin Bouygues was attached to a price of 10 billion euros, which seemed overpriced at Emmanuel Macron. The transaction was settled in cash and Bouygues had planned to use the money to buy an Orange capital increase that would have been reserved for him. (This allowed the move to Martin Bouygues, who started the success story Bouygues Telecom in 1994, to remain in an area he is particularly fond.) But Macron had conditioned the entry of Bouygues in the capital of Orange at a price floor of 18.5 euros per share (which was quoted as around 15 euros Friday). Thus increasing the price of the share Orange, this automatically reduces the value of Bouygues and therefore its future weight in the new Orange … And that’s not all … This stake in Bouygues Orange was to be accompanied by a binding clause Martin Bouygues not to get a stake in the incumbent operator for seven years and to waive double voting rights for ten years. In the end, Martin Bouygues found these unacceptable conditions and preferred to turn tail …

After the war between Martin Bouygues and Patrick Drahi (Altice) around SFR’s takeover in 2014, the proposal of the same Patrick Drahi Bouygues Telecom to buy ten billion in June 2015 rejected by Martin Bouygues, the failure of this deal today enriches the already prolific Soap Opera of French telecoms …. Following the next issue.