Patrick Drahi, owner of France's number two telecoms player Numericable-SFR, has offered to buy smaller rival Bouygues Telecom for about €10 billion in cash.

The move, which was first reported by the French newspaper Journal de Dimanche, would take the French mobile market from four to three players at a time when the merits of such consolidation are being hotly debated in Europe.

France's economy minister, Emmanuel Macron, yesterday reiterated his view that the time was not right for consolidation in the sector, which he said needed investment. France will soon kick off an auction for 4G mobile spectrum and the government is pushing operators to invest in fibre broadband.

Billionaire Drahi, who owns Numericable-SFR's parent company Altice, is offering to buy all of third-place Bouygues Telecom, which has 11 million mobile clients.

With massive cost savings possible from combining the companies, Drahi is offering a rich price, higher than in a round of sales talks last year. Most analysts value Bouygues Telecom at about €5 billion.

Drahi wants to move now because of concerns that interest rates could rise in the coming months, making Altice’s approach of highly leveraged deals more costly, said one source. Altice has snapped up US cable company Suddenlink, Portugal Telecom and SFR in the last 18 months.

It remains to be seen however whether Martin Bouygues, the scion whose family conglomerate owns the Bouygues Telecom, will agree to sell. He is pushing for a price closer to €11 billion , the sources said.

Bouygues Telecom’s parent Bouygues will hold a board meeting tomorrow to review the offer. Altice, Bouygues and Iliad declined comment.

– (Reuters)