"It took six months, but Orange, Bouygues, and Iliad have agreed on a new 20.35 billion euro bid for SFR and are now entering exclusive negotiations with the Altice France group, the company's owner. We are revising our forecasts for Orange upwards to reflect this offer and raising our price target. We expect the consolidation of MasOrange to drive growth for Orange, pending a decision on the French transaction," Berenberg detailed in a research note.

Orange is set to take over a portion of SFR's B2C customers, infrastructure, and spectrum. "We estimate that Orange will acquire approximately 1 million convergent service subscribers and 2.5 million mobile subscribers out of SFR's 25 million total subscribers (B2C and B2B). We are adding them to Orange's portfolio with a low ARPU and limited costs, resulting in a 3% to 4% increase in cash flow from the first full year, based on subscribers alone. We are adding an average of 30 to 50 basis points of growth to our forecasts and long-term growth projections."

This offer represents a 20% increase over the 17 billion euros proposed in October. It values Altice France at approximately 6.6 times its trailing twelve-month EBITDA and 14.7 times EBITDA less capital expenditures. As with the previous offer, however, the acquisition does not cover all of the group's assets.

With pro forma net debt of 16 billion euros, the implied equity value now stands at 4.35 billion euros, compared to 1 billion euros previously. At this stage, Altice France's capital is held 55% by its founder Patrick Drahi and 45% by former bond creditors.

The structure of the deal remains largely unchanged: Orange will finance 27% of the enterprise value, while Iliad will cover 31%, up from 30% in the initial proposal.

Orange will now pay 5.5 billion euros compared to 4.6 billion in October, representing an impact of 0.35 euro per share. The acquirers' press release also refers to a "socially responsible" operation, which, according to Berenberg, suggests that Orange could take on part of SFR's staff, at least during the transition period. "We have integrated approximately 5,000 new employees into our forecasts for Orange France."

Some investors fear that Orange shares will remain in a state of uncertainty for 18 months while the transaction is being evaluated. "However, MasOrange in Spain will contribute as early as the second quarter of 2026 and, in our view, will drive cash flows beyond the 5.2 billion euros projected by 2028. We are raising our cash flow forecasts by 7%," the broker concluded.