Numericable SFR: Buying media assets: great marketing, equity story still to be written…

NC-SFR announced yesterday the acquisition of media assets from Altice and Patrick Drahi’s personal holding. Many new products deriving from these deals will soon be lauched by the company, reinforcing its content offer and unique position as a media/telecoms convergent player. Following these acquisitions NC-SFR’s net debt is set to increase by EUR575m, and we do not see the acquisition of NextRadioTV’s stake as a requirement to deliver convergent offers. Also, although we acknowledge  potential editorial, distribution and advertising synergies, we remain cautious on the value creation incurred by these deals, in a French market for Pay-TV and Press where it is still proving difficult to make money.