PARIS (Reuters) - Martin Bouygues, asked once whether he would sell the loss-making French mobile phone business that has been his main contribution to the family empire, snapped: "And you, would you sell your wife?" If he seals a deal with former monopoly Orange (>> ORANGE SA), the 63-year-old would ditch Bouygues Telecom (>> BOUYGUES), returning the group his father Francis founded in 1952 to its construction roots. Yet any blow to his pride from selling the third largest mobile operator in France would be softened by a payout of about 10 billion euros (£7.82 billion) in shares and cash. "It can't be an easy decision. It would roughly be back to the group as inherited from his father. Martin Bouygues' big adventure being mobile phone," said Dominique Barjot, a historian at the Sorbonne who has written a book on Bouygues. He said Bouygues, who declined interview requests for this story, is pragmatic enough to see that a sale makes sense after low-cost operator Iliad (>> ILIAD) started a price war when it entered the mobile market in 2012.

Orange, France's largest telecoms operator, has been in talks since early January to buy Bouygues Telecom. An initial deal could happen in March after Bouygues publishes full-year earnings on Feb. 24 although Orange CEO Stephane Richard said last week he only saw a 50 percent chance of success.

Bouygues could use cash from a deal to expand in construction, increase the family's control as he prepares his succession, cut debt or make new acquisitions, analysts say.

Acquisitions could focus on electrical engineering, "a segment where the group lags behind rivals such as Vinci (>> Vinci), Spie and Eiffage (>> EIFFAGE)", Natixis analyst Gregoire Thibault said.

But he will not rush. Bouygues board member and former Alstom (>> Alstom) CEO Patrick Kron said Bouygues, a father of three who likes hunting, took "no rash decision". He may decide on one of his estates, in central France. "When things get tense, before making a decision, he drives his tractor in Sologne," said longtime friend and lawyer Jean-Michel Darrois. Bouygues has broken up before from companies to which he once seemed wedded. He said in a Figaro interview last year that he knew when to sell a business even if it was one he had created, citing Maison Bouygues, Bouygues Offshore, water business Saur and sports channel Eurosport. "I took those decisions when there was a good strategic reason to do so. To paraphrase General de Gaulle, it's not at the age of 63 that I will allow my ego to get the better of me!" The size of the stake he would gain in Orange is among the points of discussion. The French state owns 23 percent of Orange's shares and wants to keep a blocking minority. Sources close to the government have said it wants to cap Bouygues' stake at 10 percent while sources close to Bouygues have said they want a 15 percent stake.

Bouygues also needs help from younger rivals Xavier Niel of Iliad and Patrick Drahi of Numericable-SFR (>> Numericable Group). Orange has started talks with them about assets sales to satisfy competition concerns as the tie-up would create a giant with a market share of close to 50 percent.

EARNING HIS STRIPES

Bouygues runs a group spanning from construction to France's most watched commercial television channel TF1 (>> TF1) and to a stake in engineering giant Alstom (>> Alstom).

With annual sales of 33 billion euros and over 127,000 employees, Bouygues still gets about 80 percent of its sales from construction. Telecoms account for 13 percent of sales but make the bulk of Bouygues's market value of 12 billion euros.

The Bouygues family has long been a pillar of French business with government ties forged through years of bidding for public contracts.

Bouygues, a friend of former President Nicolas Sarkozy, is also on good terms with the Socialist government, which backed him against Drahi in a losing battle for control of Vivendi's mobile phone unit SFR in 2014.

The youngest of four, Bouygues joined the company in 1974 in an entry-level job after dropping out of university.

In 1989 his father Francis asked him to take over the family business. "He was very young and had to build his legitimacy among the group's barons. He was patient and tenacious enough to conquer the Bouygues fortress and put the family in control," a close observer of French business circles said. Bouygues won a battle with rival Vincent Bollore, a former classmate at a Paris private school who now chairs media group Vivendi (>> Vivendi), for control of the Bouygues's empire in 1998.

"Many people thought Bollore would win but Martin Bouygues showed he was a true boss and no longer just an heir," said longtime friend Maurice Levy, the CEO of French advertising group Publicis (>> PUBLICIS GROUPE).

The bitter battle convinced Bouygues of the need to secure family control. Bouygues and brother and deputy CEO Olivier, with whom he also shares the Chateau Montrose Bordeaux wine estate, own 20.9 percent of the company's capital and 27.3 percent of its voting rights. Employees own 23.3 percent of the capital and 30.6 percent of the voting rights.

DIFFICULT TIME

Bouygues' second defining moment came when he won France's third mobile phone licence at the height of a telecom investment craze in Europe and built Bouygues Telecom in 1994, a year after his father's death.

But Bouygues Telecom was hard hit by the price war that broke after Iliad got the fourth licence.

It responded with hefty staff cuts in 2014, a difficult time for a paternalistic boss who gives his managers his father's favourite book about how to run a company.

Losing the battle to buy SFR that year reinforced the view that Bouygues Telecom could not survive on its own.

Nevertheless, he shunned several offers for Bouygues Telecom, including a 10 billion euros offer by Drahi in June 2015, fuelling doubts over whether he intended to sell.

Bouygues said a deal with Drahi would have faced anti-trust hurdles and put jobs at Bouygues Telecom at risk.

Asked about that offer, he said: "Not everything is for sale, not everything is about money".

(additional reporting by Gilles Guillaume in Paris; editing by Anna Willard)

By Dominique Vidalon