Wednesday 26 February 2014

Is SFR back on Vodafone's radar?

There is a peculiar theory (to be clear, this is just a rumour and not a genuine scoop like some of my previous posts) doing the rounds in the market. It goes something like this: Vodafone is interested in buying French telecoms company SFR back from Vivendi.

I realise this might seem like a well-timed theory for investment bankers looking for fees from deals. Vodafone has just seen a whole load of cash from its $130 billion sale of its 45pc stake in Verizon Wireless drop into its bank account.

Vivendi, meanwhile, has just announced it is exploring "all options" for SFR after confirming earlier in the week the possibility of a merger deal with cable company Numericable, which is owned by private equity firm Altice.

However, I was actually told about the FTSE 100 company rekindling its interest in SFR a few weeks ago by a couple of old contacts who claim to be well plugged in when it comes to all matters Vodafone. Although I trust my contacts, I am not so sure about this latest theory.

In part, I am sceptical because Vodafone sold its 44pc stake in SFR, France's second-largest mobile phone company, in 2011 to Vivendi for almost Euro 8 billion.

So, buying SFR back again for a mooted valuation of Euro 15bn would mark a significant strategic U-turn for Vodafone and loss of face for Vivendi.

Still, stranger things have happened in the world of telecoms M&A. Indeed, AT&T might actually make a bid for Vodafone!

UPDATE: I now have even less conviction about this Vodafone/SFR rumour after checking it with a reliable old contact over a jolly nice lunch. I suspect this rumour is nothing more than, well, a theory!