Patrick Drahi snatches win from jaws of defeat
17/04/2026 13:13
The author is a Reuters Breakingviews columnist. The opinions expressed are her own. By Jennifer Johnson LONDON, April 17 (Reuters Breakingviews) - France's notoriously combative telecoms sector reached a rare state of harmony on Friday. Following the “immediate rejection” of a 17-billion-euro offer last October, a consortium composed of Bouygues BOUY.PA, Iliad-Free and Orange ORAN.PA made an improved 20-billion-euro bid for rival SFR. This time, the target has confirmed that talks are underway, and the price looks relatively good. Absent any antitrust problems, it all signals a possible end to the prolonged sale process. SFR's longtime controlling owner, telecom tycoon Patrick Drahi, comes out as the surprising winner. The saga has involved many twists and turns, but arguably began with a tense 2024 standoff between creditors and Drahi's historically highly leveraged Altice France empire, which owns SFR. That resulted in a debt restructuring the following year, in which lenders accepted haircuts and took 45% of the equity but kept Drahi in the driving seat, partly to motivate him to launch a sale process and hold out for a high price. That's effectively what he seems to have done. The new and improved offer, in which SFR's rivals will carve up the company, probably values the target at around 7 times 2025 EBITDA, according to Breakingviews calculations. While that’s still below comparable transactions in Europe, which have come at around 8 to 12 times EBITDA in recent years, it’s a marked improvement on the initial offer. And given that SFR's core revenue has been shrinking, it's likely the very best that Drahi and his fellow shareholders could have hoped for. It's tough to work out precisely how much value the tycoon will extract if the current deal closes. That's partly because the wider Altice France empire contains other liabilities and hard-to-value assets. One approach is to deduct the 15 billion euros of post restructuring net debt sitting in the relevant Altice France credit silo from the deal’s enterprise value. That would imply something like 5.1 billion euros of residual equity value for Altice France from the sale. Assume, for the sake of argument, that Drahi and associated shareholders are entitled to 55% of that, matching the share of the company that the old owners held after the restructuring. The result would be 2.8 billion euros of equity, before factoring in any of the other smaller assets that will still sit inside Altice France. The Franco Israeli tycoon still faces creditor showdowns at Altice International and Altice USA, making it too soon to say that he emerged unscathed from the travails of his debt laden telecoms empire. And back in France, each operator acquiring a slice of SFR will face a separate antitrust review, according to Reuters. The process will test EU regulators’ willingness to greenlight so-called four-to-three telco mergers, which the industry has long lobbied for. But compared to where he was a few years ago, Drahi is now sitting pretty. Sometimes brassy tenacity can overcome a miserable financial reality. Follow Jennifer Johnson on Bluesky and LinkedIn. CONTEXT NEWS French telecoms operators Bouygues, Iliad-Free and Orange on April 17 said they had made an increased 20 billion euro ($24 billion) bid to buy and break up rival SFR from billionaire Patrick Drahi's Altice France. Altice rejected an earlier 17 billion euro offer in October 2025. Shares in Bouygues and Orange were down 1% and 3% respectively as of 1100 GMT on April 17. Altice France's core revenues have kept on shrinking https://www.reuters.com/graphics/BRV-BRV/znvnmnodmpl/chart.png (Editing by Liam Proud; Production by Shrabani Chakraborty) ((For previous columns by the author, Reuters customers can click on JOHNSON/Jennifer.Johnson@thomsonreuters.com))