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Is Private Equity Coming?... Hooray! … For Once

16 April 2018 by lberuti

ENFP (Bouygues SA) is rumoured to be considering a bid with other investors for ALTICE’s ( Altice NV ) struggling French unit – SFR -to consolidate the telecom market. A deal would enable ENFP to take out a key local competitor and add customers in a market where profits have been squeezed by a stiff four-way rivalry. Since Iliad introduced super cheap offerings in 2012 under the Free brand, a fierce price war has taken place. Such an operation would help ENFP close the gap in terms of subscribers with Orange SA, the main operator in France. ENFP could team up with CVC Capital Partners. Usually, rumours of private equity group entering the fray send a shiver up credit investors’ spine. But such have been the worries regarding Mr Drahi’s group in recent months which faces an exodus of customers and has to tackle a €31Bln debt pile, that disenchanted investors cheered the rumour and sent ALTICE’s 5-year risk premium 23bps tighter at 441bps and SFR’s 25bps tighter at 406bps.