Vodafone yesterday renewed its €6.77 billion cash offer for Vivendi Universal's stake in Cegetel, in the latest move by the mobile phone operator to take control of the French telecommunications company.
Vodafone's offer is at the same level as its previous bid, which was rejected by the French media group as being too low. However, analysts said the offer for Vivendi's 44 per cent stake was fair and in line with current telecoms valuations.
Vivendi, struggling to cut its €19 billion debt burden, has been trying to raise money to make a bid to take control of the cash-generative telecoms business. Meanwhile, Vodafone is determined to win Cegetel, as it would fill the biggest gap in its European portfolio.
"Vodafone is very keen to complete their European footprint and want to take control of the asset," said Mr Emmet Kelly, telecoms analyst at BNP Paribas. "I think shareholders would like Vivendi to accept the offer."
Vodafone's offer for Vivendi's 44 per cent of Cegetel, which controls SFR, a French mobile operator, valued SFR at about 7.4 times next year's earnings before interest, tax, depreciation and amortisation, Mr Kelly said.
The renewed offer is at the same level that was accepted by BT Group for its 26 per cent and SBC Communications for its 15 per cent of Cegetel.
Vodafone also said its offer would enable Vivendi to cut debt of up to €7.2 billion, as it would assume €400 million of Cegetel debt that Vivendi now consolidates on its balance sheet.
Vivendi has until December 10th to accept the offer and match the bid for BT's stake. It must beat by 13 per cent the offer for SBC's holding.
Sir Christopher Gent, chief executive of Vodafone, said: "We have renewed our offer because we continue to believe that Vodafone is the natural home for Cegetel and that it would be in the best interests of all parties... Cegetel and SFR's customers would benefit from improved services and their employees from broader career opportunities."
Vivendi this week told analysts it expected SFR to generate €8 billion of revenues in 2005, with 12 per cent revenue growth in 2004. The forecasts are significantly higher than consensus expectations. - (Financial Times Service)
