(COM) 26/05/00 16:31: France Telecom expected to announce bid of about 40 bln eur for Orange next wk
France Telecom expected to announce bid of about 40 bln eur for Orange next wk
PARIS (AFX) - France Telecom SA is widely expected to announce a bid worth
about 40 bln eur in cash and shares for UK mobile phone operator Orange to
Vodafone AirTouch PLC on Tuesday, when Vodafone reports its 1999 earnings,
dealers and analysts said.
"Everybody is expecting it," said one Paris trader. "One thing for sure is
that they've got the clear lead -- nobody else is in the frame."
France Telecom has been steadily arming itself for the acquisition in recent
weeks, analysts said. After agreeing to sell its 1.8 pct stake in Deutsche
Telekom AG, the company yesterday announced plans to offload its 7 pct stake in
Telefonos de Mexico SA in a global public offering worth about 1.9 bln usd at
current prices.
The company has also reportedly completed talks with its bankers on the
terms of a loan of about 20 bln stg.
Expectations that the French operator will announce the bid as early as next
week have been reinforced by press reports, including one in today's Financial
Times, which said that Vodafone is now negotiating exclusively with France
Telecom.
Orange, which Vodafone is obliged to sell for competition reasons following
its takeover of Mannesmann AG, has attracted other interested bidders, including
the Netherlands' KPN NV, Finland's Sonera Oy and MCI WorldCom, although none of
these are believed to be ready with the financing. One obstacle to a trade sale
may be the preference of Orange chief executive Hans Snook and his management
team for Orange to be spun off from Vodafone and relisted in London.
However, analysts are betting that Vodafone will be keen on the cash
component in France Telecom's bid which it needs to finance its planned bids for
UMTS licences across Europe, including upcoming auctions in Germany and Italy,
analysts said.
France Telecom has not yet exhausted its reserves. The group still holds a
10 pct stake in U.S. long-distance operator Sprint Corp as well as 11 pct of the
French-Italian semiconductor company STMicroelectronics, both of which it has
said it is keen to sell.
At 5.13 pm, the company's shares were up 4.60 eur or 3.4 pct at 140.50,
while the CAC-40 index was 19.14 points lower at 6,110.52.
cl/cmr
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