French Telecoms Rejection of EUR17 Billion Bid Sets Stage for Consolidation.

Iliad, Bouygues, and Orange have jointly bid EUR17 billion to acquire Sfr, France's second-largest telecom operator. The bid was rejected, but could signal a new phase of consolidation in the sector. The deal could have implications for the Italian market, where Iliad has considered a partnership with TIM. If negotiations continue, Iliad's Xavier Niel may reignite consolidation efforts in Italy, where TIM is strengthening its position with a deal with Poste.

In a significant development in the French telecom sector, Bouygues, Iliad, and Orange have maintained their joint non-binding offer to acquire a substantial portion of Altice France's operations, including the telecom operator SFR, despite the proposal being rejected by Altice France, according to a MarketScreener report. The offer, submitted on Tuesday evening, valued the acquisition at EUR17 billion and was promptly turned down by Altice France on Wednesday.

Arthur Dreyfuss, on behalf of Altice France, stated that the offer was immediately rejected. However, Bouygues, Iliad, and Orange have expressed their desire to establish a constructive dialogue with Altice Group and its shareholders to explore how the project could move forward. The trio remains convinced of the relevance of their proposal and the value of the industrial project for the market and its stakeholders.

The offer targets most of SFR's assets but excludes stakes in Intelcia, UltraEdge, XP Fibre, Altice Technical Services, and Altice Group's operations in France's overseas departments and territories. This rejection comes after months of negotiations with creditors, during which Altice France announced the approval of its accelerated safeguard procedure to restructure its debt load.

French Economy Minister Roland Lescure has emphasized that the government will be extremely vigilant regarding the offer submitted on Tuesday, particularly focusing on the impact on consumer prices and service quality.

The rejection of the bid has not dampened investor sentiment, with Bouygues shares surging 7.4% and Orange shares gaining 3.5% as of 10:36 GMT on Wednesday. This development has also sparked hopes for consolidation in the Italian market, where Telecom Italia (TIT) shares rose as much as 5% on the news, according to a Reuters report. Analysts suggest that the offer could initiate a consolidation process among telecom operators in Europe, with potential benefits for the Italian market.

The deal could have implications for Iliad's Xavier Niel, who may reignite consolidation efforts in Italy, where TIM is strengthening its position with a deal with Poste. If negotiations continue, Iliad's strategic move in France could catalyze similar moves in Italy, potentially leading to significant cost savings and increased market share.