French cable company Numericable is planning an public offering this fall with an enterprise valuation of approximately €6 billion ($8 billion), reports French TV channel BFMTV and Dow Jones Newswires.
According to bankers cited by BFMTV, the company is to hold a meeting with financial analysts on Thursday at which it will discuss the details of the offering, with Deutsche Bank and JPMorgan Chase & Co acting as lead managers.
Dow Jones reports that a public offering would be a fallback option for the cable company, whose preference is a merger with a mobile operator like Vivendi-owned SFR (Paris, France) or Bouygues (Paris, France).
However, talks with Vivendi over a merger with or takeover of SFR have failed to bear fruit, prompting Numericable (Paris, France) to explore financial alternatives.
Numericable competes against broadband operators like France Telecom (Paris, France) and Iliad (Paris, France) but is currently disadvantaged by its lack of a substantial mobile operation, as providers increasingly look to compete on the provision of ‘bundled’ offers including fixed telephony, broadband, television and mobile services.
The company has had a mobile virtual network operator agreement in place with Bouygues since 2008, but margins in this area are notoriously thin and Numericable is entirely dependent on Bouygues when it comes to the quality of the network service it provides.
Analysts appear to be considering a merger between Numericable and Completel, a sister company owned by the same group of private equity firms, according to the BFMTV report.
Such a tie-up could improve the financial position of Numericable because Completel is growing faster and has less debt on its balance sheet.
At the end of 2012, Numericable served less than 5% of France’s broadband retail market, while France Telecom controlled about 42% and Iliad 23%.