Numericable (and Altice) are looking to buy the 20 per cent stake in its company held by Vivendi, and is offering €40 a share, which is about 25 per cent below their market value.

Investment bankers Exane BNP-Paribas states that the offer “is a bit stingy”, and argues that even with the obvious benefit of banking a giant cash sum (€3.9 billion) the offer makes little sense.

“Vivendi [has plenty of cash] and does not need more immediately unless it plans a mega cash return (or, very unlikely, big M&A). Securing cash now has its merits but not at a 25 per cent discount in our view.”

“As a result, we believe it makes little sense for Vivendi to accept Numericable’s offer. However, should Numericable revise its offer to €45, then the value destruction would be relatively modest (c €0.5 per share, or €600 million) and could be justified by crystallising NC’s stake value at what is a reasonable discount to the current record share price level,” says the bank’s note to clients.

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