Altice (SFR) France - comment

It is reported in various French press that Drahi is seeking to combine SFR with its French telecom competitors. The end result would mean consolidation in the sector, but the initial reaction from Bouygues and Free has been negative. 

Both Bouygues and Free will be conscious of being left the bridesmaid (and their peers consolidating) and Altice will seek to exploit that, but our initial reaction is this is negative for Altice. Its silence on the deleveraging plan (including the data centre asset sales) exposes the poor operational performance, which over-leveraged balance sheet rests on.