373
Annual Report -
2013
-
Vivendi
Recent events |
Outlook
5
Section 2
Outlook
On February 25, 2014, the date Vivendi published its 2013 results,
Vivendi did not give any indication on the Group’s businesses 2014
outlook or on the Group’s consolidated 2014 outlook.
The Supervisory Board took the following criteria into consideration
in coming to its decision:
quality of the industrial project.
The Altice/Numericable project
is based on fixed and mobile convergence, with synergies resulting
from the interdependence of the two merged entities’ networks.
SFR-Numericable’s positions in very high speed fixed and mobile
will generate new growth opportunities, an acceleration of the
number of connected lines and very high quality offers for enterprise
and retail customers. They will also offer important development
opportunities for Quadruple Play and new usage. They are
consistent with the French government’s “
France Très Haut Debit
”
plan launched in February 2013;
commitment to preserving employment.
Vivendi set as a
prerequisite for the potential buyers a commitment to employment.
This also corresponds to the priorities defined by the French
government. The industrial project of Altice/Numericable fully
guarantees development of sustainable employment due in
particular to the planned investments;
competition risks.
All the experts consulted concluded that the
Altice/Numericable offer presents the lowest competition risks.
SFR and Numericable are not present on the same market segments
and their activities are complementary; and
valuation for Vivendi.
Vivendi selected the most balanced offer
between cash upfront and stock participation allowing the Group
to benefit from the highest total valuation. While pursuing its
announced strategy to focus on media, Vivendi wants to support
SFR, its 27 year-long subsidiary, by strengthening its industrial and
social structure.
Vivendi’s Supervisory Board has therefore chosen to receive
€13.5 billion at closing of the transaction as well as a potential
earn-out of €750 million, with a possibility to sell its 20% interest at a
later stage. This should represent a total value in excess of €17 billion,
or an estimated 2014 EV/EBITDA of 7.0x.
This balance between cash upfront and future upside from industrial
value creation fits with Vivendi’s philosophy, an industrial and financial
group concerned about creating long term value in the interest of
shareholders, employees and consumers.
Vivendi will now, as part of a new mutually-agreed exclusivity
agreement with Altice/Numericable, consult the employee
representative bodies of Numericable, Vivendi, and SFR on the plan
presented by Altice/Numericable and begin procedures to obtain
authorizations from the relevant administrative authorities.
The closing is anticipated by the end of 2014.
This decision puts an end to SFR’s demerger plan.
