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Bouygues SA made an offer to Iliad SA to sell its mobile-phone network and some radio spectrum in a deal estimated to 1.8 billion euros (2.5 billion dollars). The company has been in talks with Vivendi SA over its largest mobile operator – SFR, which is said to be exactly the reason why it has headed towards a deal with Iliad SA, but only if its bid for the SFR unit goes through.

The head of Bouygues Telecom unit – Mr. Olivier Roussat, said in an interview for a newspaper that the company has reached an agreement with the mobile operation of Iliad – Free, to sell it its network in case Vivendi accepts its 14.5-billion-euro offer for SFR unit.

Analysts, who work for Barclays Plc wrote in a note cited by Bloomberg: “The market is not yet factoring in the potential upside from a SFR-Bouygues deal”. One of the analysts working for Raymond James Euro Equities wrote in a note: “By accepting the Bouygues offer, Vivendi would also take the risk of delaying its strategy. We continue to see a SFR plus Numericable scenario in pole position, with antitrust concerns and Vivendis timing more likely to prevail.”

As reported by Bloomberg, Bouygues SA revealed that its case to the French Competition Authority can be made “from the outset with measures designed to maintain a competitive market for the benefit of consumers”. The SFR unit is considered as the second largest mobile group in the country after Orange SA, which is the current leader on the market. This move of Bouygues SA is a part of a more serious strategy targeted on convincing both Vivendi SA and public officials to prefer its offer for SFR than Altices one.

Last week Bouygues was reported to have offered a total of 10.5 billion euros (14.57 billion dollars) for SFR in an attempt to merge it with its Telecom unit. In comparison, the offer of its most serious rival – Altice – was estimated to 11 billion euros, while trying to merge the unit with the cable operator Numericable Group SA.

The assets involved in the negotiations between Bouygues SA and Iliad include the wireless network of Bouygues, as well as some of its spectrum in 2G, 3G and ultra-high-speed 4G technology.

Bouygues SA rose by 9.07% by 10:15 GMT in Paris to trade at 32.76 euros per share, marking a one-year change of +47.38%. The company is valued at 9.61 billion euros. According to the Financial Times, the 13 analysts offering 12-month price targets for Bouygues SA have a median target of 29.00 euros, with a high estimate of 35.00 euros and a low estimate of 21.00 euros. The median estimate represents a -3.61% decrease from the last price of 30.09 euros.

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