Mannesmann To Pay Dearly For Orange
By Kirstin Ridley
LONDON (Reuters) - Mannesmann AG, the aggressive German concern vying for control of British cellphone group Orange Plc (Nasdaq:ORNGY - news), looks set to pay around two thirds more than rival Deutsche Telekom invested to cross the Channel.
Analysts said Wednesday Mannesmann might be negotiating a deal that would value Britain's third-biggest cellphone group at about $30 billion.
Such a value would equate roughly to a price per customer that is significantly more than was paid in August by Mannesmann's arch-rival Deutsche Telekom for One2One, the smallest of Britain's four cellphone firms.
``I think image wise and brand wise, Orange definitely deserves a premium to One2One, but does it deserve to account for so much more?' asked Tressan Maccarthy, telecoms analyst at Credit Lyonnais Laing.
Speculation about deals in the mobile sector has not stopped at Mannesmann and Orange.
Fears that market leader Vodafone Airtouch Plc (NYSE:VOD - news) may be considering a bid for Mannesmann to stymie the German group's move sent Vodafone's stock lower, making it the biggest loser in the FTSE 100 index.
``People are worrying that Vodafone might make a bid for Mannesmann...plus the stock has had a huge run and it's on a big premium rating,' said a senior dealer at one leading investment bank.
A merger of Mannesmann and Orange would deal a blow to the European aspirations of Vodafone, given that Vodafone and Mannesmann are partners in Germany, Italy and France.
Valuing Prospects
Analsyts said valuing mobile telephone companies remains an inexact science.
Crude valuations per subscriber can be distorted if applied to fast growing relative newcomers like Orange, which is the youngest and arguably the most aggressively innovative of the four operators.
Orange, floated in 1996, shook the industry by introducing per-second billing and is the first to have produced a prototype videophone as the market gears up for next generation of high tech mobile licences. Both Orange and One2One have purely digital networks and both lose money.
Make a name for yourself online!
-------------------------------------------------------------------------------- |
