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Numericable in talks to buy SFR: Les Echos

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A logo of French cable operator Numericable is seen behind microphones during a news conference in Paris, October 28, 2013. REUTERS/Christian Hartmann

PARIS (Reuters) - French cable firm Numericable is in talks to buy mobile operator SFR in a deal that would value the unit of media group Vivendi at more than 15 billion euros ($20.6 billion), Les Echos newspaper reported on its website on Sunday.

Vivendi has already reached an agreement in principle to sell SFR to Numericable, and the parties aim to reach a firm deal in a few weeks, the newspaper said. Numericable is 40 percent owned by Altice, the holding company of founder Patrick Drahi.

Vivendi was not immediately reachable for comment. Altice declined to comment.

The transaction under discussion would see Altice have a majority stake in the combined group, while Vivendi would hold 32 percent, according to Les Echos.

The deal would be carried out via about 8 billion euros of debt and would lead to synergies of 6 billion, the paper added.

Vivendi's former cash cow, SFR has been hammered by a price war started when rival Iliad undercut it with its low-cost "Free Mobile" offer, forcing it to spend money to try and keep clients.

Cable operator Numericable, which listed on the stock market in November in France's biggest initial public offering since 2009, had previously been seen as a potential takeover target for SFR and rival Bouygues Telecom .

Altice also owns French and Belgian cable companies and mobile operations in Israel, and itself listed on the stock exchange at the end of last month.

Altice, built via a decade of acquisitions, is surfing a wave of investor interest in the European cable sector as a growing number of consumers turn to these companies for television and broadband at faster speeds and lower prices than from telecoms rivals.

($1 = 0.7275 euros)

(Reporting by Gwenaelle Barzic and Leila Abboud; Writing by James Regan; Editing by Eric Walsh)

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