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Altice’s SFR Buyout Offer Delayed by At Least Two Weeks

September 20, 2016

All roads lead to Tianjin.Photograph by Alexandra Ribeiro — EyeEm Getty Images/EyeEm

Altice’s all-share buyout offer for SFR shares it does not already own will be postponed by at least two weeks because of a delay in regulatory approvals, a source close to the matter said on Tuesday.

Altice, the Luxembourg-based telecoms and media group controlled by Franco-Israeli billionaire Patrick Drahi, has said it wants to simplify the group’s structure following its rapid expansion through acquisitions in Europe and the United States in the last three years.

The French markets watchdog AMF is now expected to announce its decision on Altice’s exchange offer for the outstanding 22.25% of SFR, France’s second-biggest telecoms operators, in the week of Oct. 3, the source said.

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Altice had first expected to get the regulatory go-ahead on Tuesday, but additional documentation has been requested, the source said.

Under its initial schedule presented to investors on Sept. 5, Altice predicted its public offer would extend from Sept. 22 to Oct. 20. The additional delay needed for the release of AMF’s decision will postpone the formal public offer by the same amount of time.

The French regulator declined to comment.

Altice said on Sept. 5 that it would offer eight of its class A common shares for five SFR Group shares.

The bid corresponded at the time to a value per SFR Group share of 24.72 euros, a 2.6% premium to the closing price on Sept. 2. SFR closed up 3.3% on Tuesday at 26.1 euros a share.

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In a letter sent to AMF last week, the French fund CIAM, an SFR minority shareholder, complained about the terms of the buyout offer.

SFR, the second largest operator in France with a turnover of 11 billion euros in 2015 has a market cap of about 11.45 billion euros ($12.78 billion) according to Reuters data, valuing the 22.25% stake at about 2.5 billion euros.

Altice said it reserved the right to request from French market regulator AMF a squeeze-out and delist SFR shares within a three-month period from the closing date of its offer in the event that it holds at least 95% of the voting rights in SFR.