Bouygues bulks up

17 January 2003

Despite the state of the market for telecoms assets, the German utility is getting cash and a decent capital gain. Meanwhile, Bouygues is continuing to grow its control of its attractive telecoms subsidiary, without increasing debt to pay for it.

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Bouygues has agreed to buy E.On's 15.9% shareholding in its telecoms subsidiary for E1.1bn, potentially taking its own stake to 83%. The transaction, which values Bouygues Telecom at E8.1bn, has two phases. Bouygues will buy an initial block of 5.8% of the shares for E400m, including taking on E61m in shareholder loans. E.On has then granted Bouygues a call option over the rest of its stake between April 2003 and October 2005 for a E671m price. The sale is subject to preemption rights held by the other shareholders in Bouygues Telecom. They are BNP, with 6.5% and BDT, a holding company in which Bouygues owns 79% and JC Decaux 21%, with 50% of Bouygues Telecom.

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