Drahi Said to Draw Interest in SFR Business in Breakup Push

(Bloomberg) -- Patrick Drahi’s Altice France SA has attracted interest from potential buyers for the enterprise unit of French carrier SFR, as the billionaire explores ways to pare the debt load of his telecom empire, people familiar with the matter said.

Altice has asked its advisers to share information with potential bidders for SFR Business, the people said. The unit, which provides fixed and mobile connectivity, cloud services and cybersecurity to corporate clients, could be valued at several billion euros in a deal, the people said.

SFR Business could draw interest from rival operators Iliad SA’s Free and Bouygues SA as well as private equity investors, the people said, asking not to be identified as the information is private. The unit could be seen as a prized asset for other operators in France where their business-to-business operations are subscale compared to those of market leader Orange SA, they said.

SFR ranks as the second largest telecommunications company in France, after Orange. The mooted sale of the enterprise unit may also re-ignite previous attempts to split up SFR’s assets among local operators in France, some of the people said. 

Deliberations are ongoing and Altice France could still decide against selling the unit, the people said. Representatives for Iliad and Bouygues declined to comment.

“Altice is focused on implementing the debt agreement, considering the sale of non-essential assets, and continuing the commercial relaunch of SFR and improving service quality, two indicators that have already been well underway for several months,” a spokesperson for Altice said in a statement. 

Drahi has been exploring a number of options for the future of his business empire, which he built up through a frenzy of debt-fueled acquisitions. In February, Altice France and a majority of its creditors reached a deal to slash the company’s debt by €8.6 billion, around a third of the total, while letting Drahi keep control of the internet and mobile-phone operator.

Discussions to break up SFR among the French carriers kicked off earlier this year but negotiations slowed in the summer months, according to the people. The talks are likely to resume in the coming weeks, they added. The breakup plan would likely involve a sale of SFR’s fixed network, which consists of backbone and fiber cables across densely-populated areas in France, the people said.

A sale of XpFibre, the SFR’s fiber network that Drahi owns a stake of 50.01%, could come at a later stage, they added. Drahi had previously tried to sell his stake in XpFibre last year, though a sale of that business isn’t imminent as the tycoon focuses on other divestments first, the people said. 

--With assistance from Jillian Deutsch.

(Updates Bouygues’ comment in fifth paragraph.)

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