LONDON â€" Numericable, the French cable unit of Altice, is preparing what could be the largest junk bond offering ever to help fund the acquisition of Vivendi’s mobile unit, SFR.
Earlier this month, Altice, a cable and mobile services provider based in Luxembourg, prevailed in a bidding war for SFR in a deal worth up to 17 billion euros, or about $23.5 billion. Altice plans to merge SFR and Numericable after the acquisition.
Numericable was expected on Wednesday to price a high-yield bond offering worth up to €8.5 billion, which would be about €2 billion more than originally expected, according to people familiar with the matter.
High-yield bond offerings are known as junk bonds because they are considered risky corporate debt that pays high interest rates.
The offering is being managed by JPMorgan Chase, Deutsche Bank and Goldman Sachs. It is expected to far outpace a $6.5 billion junk bond sale by the mobile provider Sprint Nextel last year, the largest high-yield offering on record, according to Dealogic.
The Numericable offering will be broken up into several tranches and issued in both euros and dollars.
Earlier this month, the supervisory board of the French media conglomerate Vivendi voted unanimously to sell SFR to Altice, choosing the Luxembourg company over Bouygues, the owner of Bouygues Telecom, the third-largest mobile service provider in France, after Orange and SFR.
Bouygues had hoped to reshape the French telecommunications market by combining two of the country’s largest mobile providers.
The battle for SFR pitted two French billionaires against each other: Martin Bouygues, who runs the diversified industrial group that bears his name, and the French entrepreneur Patrick Drahi, who since 2002 has built Altice into a global operation with cable and cellphone assets in Europe and the Caribbean.
As Vivendi was considering the bids, Arnaud Montebourg, the French minister of the economy, said he would prefer a deal with Bouygues and that he questioned the amount of debt that Altice might use to acquire SFR.
The deal comes amid a series of consolidation moves by Europe’s cable and telecommunications providers. To attract and retain customers, mobile providers are also expanding their offerings into cable and traditional landline services. Cable companies have responded by offering exclusive content and partnering with mobile carriers to offer additional services.
