Bouygues to raise stake in eponymous cellco subsidiary

17 Jan 2003

French construction group Bouygues [BOUY.PA] is upping its holding in its subsidiary cellco Bouygues Telecom by agreeing to buy the 15.9% stake owned by German utility E.ON for EUR1.1 billion. The price includes EUR140 million of shareholder loans and will see Bouygues initially acquire 5.8% of the E.ON stake for EUR400 million. The group then has a call option to buy the remaining shares between April 2003 and October 2005. Upon completion of the transaction Bouygues’ direct stake in Bouygues Telecom will increase 21% to 36.9%. Bouygues’ 79.1%-owned BDT subsidiary also has a 55% stake in the operator. The deal values the cellco at EUR5.8 billion, or EUR143.23 per share, 15% less than the EUR168.51 per share Bouygues paid Telecom Italia for a 10.8% stake in the operator last February. The six year-old Bouygues Telecom is the youngest and smallest of France’s three mobile operators with a 15.1% market share at the end of 2002, some way behind rivals SFR and Orange, which boast 35.1% and 49.8% of the market respectively.