France Télécom is in advanced talks to sell its 35 per cent stake in Orange Austria to Hutchison Whampoa, the WSJ reports, citing people familiar with the matter who said the deal could be finalised in the coming weeks, and would value Orange Austria at €1.4bn. Private-equity group Mid Europa Partners owns the remaining 65 per cent stake in the Austrian mobile company, which is the country’s third-largest provider with about a fifth of the market. One of the sources said Hutchison is one of several bidders for the France Télécom stake in Orange Austria. A spokeswoman for Mid Europa Partners declined to comment. Read more
Breaking pre-market news on Monday,
- India’s GTL cancels tower merger plan with Reliance – via Reuters. Read more
France Telecom’s hopes of taking full control of ECMS were dashed on Wednesday when an Egyptian court blocked its offer for minority stakes in the Egyptian mobile operator. The Cairo court placed an injunction on the French group’s €1.5bn bid for outstanding stakes in ECMS, due to expire on Thursday, after concluding the price was too low. Its preliminary ruling – a full decision comes next month – is a victory for Orascom Telecom, which is vying with the former French monopoly for control of Egypt’s largest mobile company. Read more
France Telecom, Europe’s third-largest telecoms group, on Monday lost its court appeal against a European Commission order to repay about €1bn ($1.5bn) of state aid to the French government that Brussels had deemed illegal. The Commission’s competition department ruled in 2004 that tax concessions enjoyed by the telecoms group a decade ago amounted to state aid and infringed EU rules. The tax arrangements ran from 1994 to 2002, which was a low point in the telecoms company’s fortunes. Read more
Vodafone and Telefónica of Spain are under mounting pressure to strengthen their positions in the UK after the publication of plans for a joint venture between France Telecom’s Orange UK and Deutsche Telekom’s T-Mobile UK. If approved by regulators, the merger would create Britain’s largest mobile operator. Analysts also raised concerns about the potential for clashes between France Telecom and Deutsche Telekom inside their UK “mobile champion”. The two are committed to their 50:50 joint venture for three years, after which one could buy the other out. Read more
Who said M&A activity was “resting” – if not dead (for now)? Indeed, even a month ago, deal-making worldwide was looking rather like Monty Python’s proverbial dead parrot.
In fact, as FT Alphaville recently noted, August before its final week was shaping up to be the worst for deal making since 1995, according to Dealogic. Read more
Deutsche Telekom is close to finalising a deal with France Telecom to form a joint venture out of their UK mobile businesses and seize first place in the competitive UK market. An agreement involving France Telecom’s Orange UK and Deutsche Telekom’s T-Mobile UK could be announced as early as Tuesday. Citigroup analysts value Orange UK at £4.1bn and T-Mobile UK at £3bn. The JV would overtake Telefónica’s O2 subsidiary and Vodafone’s UK business in the UK. Read more
Deutsche Telekom has started talks with the UK’s Vodafone, France Telecom, and Telefónica of Spain about selling T-Mobile UK, its flagging mobile phone unit which was valued in early summer at €3bn-€4bn. All three companies have shown interest, although talks are understood to be at a preliminary stage. A merger between T-Mobile UK and France Telecom’s Orange UK – an idea floated by the French group – is still on the table, say people close to the talks. Read more
This CDS report was written by Markit’s Gavan Nolan
Credit experienced once of its strongest sessions for some time today as the earnings season continued to provide evidence of a recovering corporate sector. The Markit iTraxx Europe index closed at 87.5bp, nearly 7bp (7.1%) tighter than yesterday’s close. The Markit iTraxx HiVol index did even better, tightening 15bp (8.2%) to close at 163bp, while the Markit iTaxx Crossover was no slouch, closing at 619bp (-35bp, 5.4%).
The rally outpaced equities, where benchmark indices hit new highs for the year. Unsurprisingly, defensive credits lagged cyclical names. Utilities such as GDF Suez, E.ON and Centrica were among the few names to widen. Most other sectors enjoyed significant gains, with several firms posting relatively strong results. Read more
The prospect of a bidding war for T-Mobile UK loomed on Wednesday night as it emerged that Telefónica of Spain is considering a bid for the UK’s fourth largest mobile phone operator. Telefonica fears competitive threats to O2, its leading UK mobile business, if Vodafone buys T-Mobile UK from Deutsche Telekom. Separately, it also emerged that France Telecom is considering a joint venture between Orange, its UK mobile business, and T-Mobile UK. Read more
Shares in France Telecom jumped 7.2% on news Monday that it had abandoned its $40bn cash and share bid for TeliaSonera, leaving its plans to create Europe’s largest telecoms company in tatters. Shares in the Nordic operator sank 10.4% to Skr44.60. Negotiations at the weekend were terminated after France Telecom could not agree a price with TeliaSonera or its main shareholder, the Swedish government. The development raises the question of who will buy Stockholm’s 37% stake in TeliaSonera ahead of its 2010 deadline. No other bidders have expressed interest and rumours of a rival bid from Telenor, the Norwegian telco, have dissipated. The price was too high and the message was clear, in Lex’s view: France Telecom is better off without TeliaSonera and consolidation of the European telecoms sector must wait. Read more
France Telecom’s stock price says it all. Shortly after Monday morning’s news that France’s leading telco had abandoned its $42bn bid for TeliaSonera after failing to agree a price with the Nordic group’s main shareholder, the Swedish government, France Telecom shares rose 7 per cent in early Paris trade.
Many France Telecom shareholders and industry analysts had questioned the strategic logic behind the transaction, pushing the share price down by 20 per cent since it was announced, although France Telecom insisted the acquisition of TeliaSonera would enhance business and enable the enlarged group to negotiate better deals with suppliers such as Nokia and companies such as Google. Read more
France Telecom’s indicative $41bn cash-and-shares offer for Scandinavian telecoms group TeliaSonera should be settled in the next day or two, possibly with an increase on the cash side, according to French daily Le Figaro, reports Reuters. In an advance extract from Monday’s edition, Le Figaro said the situation would “take a decisive turn” on Monday or Tuesday. The WSJ reports the companies were in talks Sunday after France Télécom indicated it would sweeten its bid for the Swedish phone company. TeliaSonera rejected merger talks after France Télécom declared its interest in the Swedish carrier in April, but changed its position after France Telecom indicated willingness to add cash to its offer. Read more
France Telecom is considering raising its informal takeover offer for TeliaSonera, the Nordic telecoms company, despite earlier insistence it would not increase its $41.3bn cash and stock offer until after TeliaSonera agreed to talks about its June 5 takeover proposal. But France’s leading telecoms company is now considering boosting the cash element of its offer, in an attempt to break the deadlock between the two companies. TeliaSonera’s board rejected the initial offer and said it would not hold talks unless the terms were improved. Meanwhile, the Swedish government, which owns 37% of TeliaSonera, came under renewed pressure to walk away from France Telecom’s offer after a government watchdog body criticised the administration’s approach. Read more
TeliaSonera is unwilling to hold talks with France Telecom until the French group has improved its takeover offer for the Nordic company, say people close to the situation. France Telecom is under mounting pressure to sweeten its €41.1bn cash and stock informal offer because TeliaSonera is refusing to countenance talks about the proposal it rejected within hours of it becoming public. Read more
Sweden’s government is facing accusations that it has mishandled the sale of a controlling stake in TeliaSonera, the telecoms company that is the subject of a $41bn takeover bid by France Telecom. Riksrevisionen, the national audit office, is expected in a forthcoming report to criticise the government for an alleged lack of expert consultation ahead of the planned sale of its 37% stake. The watchdog’s conclusions could call into question the government’s ability to negotiate the best possible price. France Telecom has offered the equivalent of $41bn in cash and shares for TeliaSonera, based on France Telecom’s June 9 closing share price of €17.91. The offer has been rejected by the government and the company as too low. Other bids are expected but have yet to emerge. Read more
France Télécom warned it would walk away from its proposed €26.5bn ($41.6bn) takeover of TeliaSonera unless the Nordic operator rapidly signalled its interest in a tie-up. Gervais Pellissier, France Telecom’s finance director, said the former French monopoly could withdraw its offer if its share price “started to plunge” amid continuing uncertainty over a deal. France Télécom launched its cash-and-shares bid on Thursday, but it was rejected as too low by TeliaSonera’s board and the Swedish government, which owns 37% of the Swedish-Fininish operator. Read more
Is France Telecom’s mangled takeover approach for Nordic rival TeliaSonera the worst-received deal in recent times?
From a SocGen equity sales/research flash, wending its way around the City on Friday: Read more
The board of TeliaSonera on Thursday rejected a cash and share offer by France Telecom which would give the Nordic telecoms company an equity value of up to SKr282bn ($47bn). France Telecom earlier confirmed an FT report that it had made an informal takeover offer for TeliaSonera to pay SKr63 in cash for 52% of TeliaSonera’s shares and in stock for the rest. France Telecom would borrow €17bn-18bn to fund the deal. TeliaSonera shares rose 7.4% to SKr57.75 on Thursday, giving it a market cap of SKr259.3bn while France Telecom shares were down 4% at €18.46. Swallowing TeliaSonera would certainly make France Telecom big, notes Lex. But whether France Telecom’s shareholders stand to benefit from the deal is more questionable. Read more
TeliaSonera and France Telecom were the focus of European credit markets on Thursday as the Nordic operator rejected a $47bn bid from its French peer.
The cost of protecting the debt of both companies rose, signalling the market’s worries that a deal may yet go ahead and harm each company’s creditworthiness. Read more
France Telecom has made an informal takeover offer for TeliaSonera, valuing the Nordic telecoms company at up to SEK291.9bn ($48.3bn), said people close to the situation. France’s leading telecoms company is willing to pay SEK60 to SEK65 per Teliasonera share, which would give TeliaSonera an equity value of SEK269.4bn to SEK291.9bn. An announcement of the indicative offer could come as soon as Thursday. If a deal is reached, it would mark the latest step in consolidation of former European telecoms monopolies. Shares in both companies closed down less than 1% Wednesday. Read more
France Telecom has stepped up discreet preparations for a possible takeover of Nordic rival TeliaSonera despite concern about Swedish government reticence at the sale. The former French monopoly has approached banks about a €10bn ($15.5bn) loan facility to finance a purchase of the Swedish-Finnish operator and has also sounded out institutional investors about such a deal. However, France Telecom insiders said the Swedish government – which owns 37% of TeliaSonera – would “take some convincing” to agree a swift sale. Stockholm wants to settle outstanding security concerns and potential competition issues while holding out for higher bids for its stake. Read more
France Telecom is in the early stages of examining a takeover of TeliaSonera, the Nordic operator, in a bid to increase its exposure to emerging markets and strengthen mobile internet services. Gervais Pellisier, France Telecom’s finance director, told the FT his company was looking at a tie-up with the Swedish-Finnish operator as well as other options, including Telenor of Norway. But he indicated the former French monopoly was in “no hurry” to open talks. For the Swedish government, which owns 37% of TeliaSonera, the tie-up could further its aim of privatising the company by 2010. The Finnish government owns 14%. Read more
Alltel sells $1bn in high-yield debt
Alltel managed to sell $1bn in high-yield debt needed to help fund its private equity LBO in a last-minute deal Friday. TPG and Goldman Sachs Capital Partners acquired the wireless operator in a $27bn deal, which also closed Friday.
France Telecom wins Kenyan auction
France Telecom is set to become the third big mobile phone operator in Kenya, one of Africa’s most coveted markets, after trumping three rival bidders and paying $390m for a 51% stake in Telkom Kenya, the state telecoms monopoly.
TMG prices largest IPO in Egypt this year
Talaat Mostafa Group , an Egyptian real estate company, on Friday announced the pricing of its IPO, which could raise more than $850m and make it the largest listing on the Cairo and Alexandria Stock Exchange this year, with an initial market cap of E£23bn. Trading is scheduled to begin Nov 28. Read more
Italian banks have made fresh approaches to Spain’s Telefónica and France Telecom about their interest in joining a consortium that could buy a controlling stake in Telecom Italia. Intesa Sanpaolo and Mediobanca made the approaches this week following the recent decision by AT&T of the US to end its interest in TI. The banks are hoping a leading European telecoms company will join a consortium that also includes Italian investors. Any grouping would bid for shares in Olimpia, the holding company through which Pirelli, the Italian tyre company, has a controlling stake in TI. Read more
The head of France Telecom’s mobile businesses is stepping down, the Paris-based telecoms group will announce on Thursday. Sanjiv Ahuja has chosen to leave his role as chief executive of Orange, the brand used by France Telecom for its domestic and international mobile businesses, said people familiar with the matter. They added that the parting was amicable, and Mr Ahuja’s successor may be announced on Thursday when France Telecom reports its first-quarter results. Read more
Orange Nederland, the Dutch unit of France Telecom, has reportedly attracted the attentions of five different parties.
The bidders are led by Deutsche Telecom’s mobile division T-Mobile, according to AFX News, which cited a story appearing in Dutch newspaper Het Financieele Daglblad on Tuesday.
France Telecom, which has not publicly confirmed any sale, is looking for between €1bn and €1.5bn from the deal, the report said.
Other potential buyers are Liberty Media and a Warburg Pincus/Cinven grouping, both of which already have a presence in the country’s cable network – Liberty through UPC and the private equity pair through Casema and Kabelcom. The report said the rationale of any deal for those in cable would be the provision of ‘quadruple play’ services in the Netherlands, an option currently only available to incumbent telco KPN. Read more
France Télécom is considering selling the Dutch unit of its Orange mobile-phone operations, reports the Wall Street Journal, citing several people familiar with the situation. The French company has hired Lazard to scout interest in the Dutch operations, according to these people. The Dutch unit of Orange, which analysts value at €1bn to €1.5bn, is the smallest operator in the Dutch mobile market, with an estimated share of 8%. Read more