LONDON â€" Deal makers are once again circling Europe’s telecommunications industry looking for big buys.
The French cable operator Numericable and its largest shareholder, Altice, a cable and cellphone provider, are preparing a bid of up to $20 billion for SFR, the mobile unit of the Paris-based conglomerate Vivendi, according to a person with direct knowledge of the matter.
The two companies have yet to submit a formal proposal, and may face competition from French rivals, namely Iliad and Bouygues Telecom, added the person, who asked to be anonymous because he was not authorized to speak publicly on the possible bid.
It remains unclear when a takeover offer, which would involve a combination of debt, asset sales and capital raising, might be formally made. But Altice has lined up a series of banks to provide debt financing for the deal, the person said.
The possible bid was reported earlier by the French newspaper Les Échos.
The news comes a few weeks after Vivendi, which already had announced plans to spin off SFR, said that Altice had approached it about a potential deal.
The European telecommunications sector has been rife with deals in the past 12 months. Some of the Continent’s largest players, like Vodafone of Britain and Telefónica of Spain, have positioned themselves to take advantage of consumers’ growing appetite for mobile data and cable services.
Earlier this year, Altice, which has cable and cellphone operations across Europe and in the Caribbean, raised 1.3 billion euros, or $1.8 billion, through an initial public offering.
The company’s founder, Patrick Drahi, had said that the listing in Amsterdam was intended to reduce Altice’s debt, and that he was looking at up to 10 potential acquisitions to expand the business into new markets. Altice already owns a 40 percent stake in Numericable.
While European telecommunications executives are eager to pursue deals, many remain aware that antitrust officials in the European Union will not approve takeovers if they result in major companies gaining more market share.
Last week, the European Commission sent a formal complaint to Telefónica over its proposed $11.7 billion takeover of the German unit of the Dutch telecommunications company KPN. The competition authorities may force Telefónica to offload some of its German operations to ensure that local consumers have sufficient choice among cellphone providers.
Many industry watchers say the severity of the commission’s terms for approving the Telefónica deal, which were not disclosed, could set the tone for future acquisitions in the sector. Analysts said that Numericable and Altice could gain regulatory approval for the SFR deal because the two companies do not have cellphone operations in France.
Vodafone is considering a potential bid for the Spanish cable operator Ono that could value the company at up to $14 billion. Both companies declined to comment on any potential offer.
International players like AT&T are also rumored to be looking for deals in Europe, and Liberty Global already has snapped up cable assets in Britain and Germany.
