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TeliaSonera not moving until FT increases its bid, paper says (France,Sweden)

  • June 13th, 2008
  • 2:36 pm

The Financial Times reports that TeliaSonera is not ready to talk to France Telecom (FT) until the French firm increases its takeover bid. On 5 June FT announced a EUR41.1 billion (USD63.4 billion) cash and stock deal for the Nordic giant and said it would not increase the offer. However, the following week people familiar with the situation said the French telco was willing to up its offer if TeliaSonera agreed to hold talks. The paper says that talks would have ‘no basis’ as the TeliaSonera board has dismissed the original offer and no enhancement has been proffered by FT to change the status quo.

   

France Telecom close to walking away from TeliaSonera proposal (Sweden)

  • June 9th, 2008
  • 3:12 pm

The Financial Times reports that France Telecom (FT) has warned that it would walk away from its proposed EUR26.5 billion (USD41.6 billion) takeover of TeliaSonera unless the Nordic operator rapidly signalled its interest in a tie-up. FT’s shares have lost around 10% of their value since the board of TeliaSonera last Thursday rejected a friendly takeover offer by FT which would have valued the Scandinavian telecoms giant at around SEK282 billion (USD47 billion). The Paris-based operator submitted an ‘indicative’ SEK56.225 per share cash and stock offer, amounting to a cash transaction for around 52% of the Stockholm-based firm’s stock, with the remainder being paid for in shares, at a ratio of three new FT shares for every eleven TeliaSonera shares. However, TeliaSonera’s board (backed by a Swedish cabinet member) unanimously agreed that the offer ‘substantially’ undervalued the company. Reuters writes that FT’s Chief Financial Officer Gervais Pellissier told the Journal du Dimanche newspaper that FT had no plans to raise the shares-and-cash bid. He was quoted as saying: ‘There are two grounds on which we could withdraw the offer. The first is that it will not be received as friendly by the shareholders and management of TeliaSonera…The second would be the continuation of market turbulence. If our share price continues to plunge, that would make the operation difficult.’

   

 

France Telecom bid for TeliaSonera ‘too low,’ says official (Sweden)

  • June 6th, 2008
  • 2:26 pm

The Swedish government believes that a €33 billion (US$51 billion) bid for operator TeliaSonera by France Telecom was too low, an AFP report said, quoting Swedish Finance Minister Mats Odell.

The Swedish state is the largest shareholder in the company, holding a 37.3% stake, the AFP report said.

“My preliminary conclusion is that the bid from France Telecom does not correspond to TeliaSonera’s full potential and worth. I thus share the TeliaSonera board’s interpretation of today’s bid,” Odell said in a statement.

The TeliaSonera board of directors decided unanimously to reject the France Telecom proposal, worth about €33 billion, saying it “substantially undervalues the company.”

The Swedish state has previously announced plans to sell its stake in the phone group, along with its holdings in five other companies. In May 2007 it sold 8% of TeliaSonera to institutional investors.

Swedish institutions and companies own 18.2% of the company, which came about through a 2002 merger between Swedish Telia and Finnish Sonera, while the Finnish state owns 13.7%, the report said.

   

Telecom Italia to cut 5,000 jobs, have higher costs in ‘08 (Italy)

  • June 5th, 2008
  • 2:36 pm

Telecom Italia on Wednesday said it will cut 5,000 jobs through 2010, a move that will increase costs this year to yield savings of €300 million a year once the job reduction is complete.

The Reuters report said the operator plans to spend €350 million this year, €250 million more than forecast in March, to cut staff.

“They will mainly impact 2008 results and the relative targets announced in March and will be more than offset by savings expected in the next two years,” Telecom Italia said in a statement.

On March 7 Telecom Italia said it was targeting 1-2% a year revenue growth between 2008-2010 and earnings before interest, tax, depreciation and amortization (EBITDA) of 39% of revenues.

Telecom Italia has about 83,400 employees.

The former monopoly also said it created a Domestic Market Operations Division integrating its fixed, mobile and top clients structures.

The new unit, to be headed by Oscar Cicchetti, will focus on customer segments rather than on mobile or fixed-lined clients. Integrating marketing, sales and field service operations will allow Telecom Italia to save money and be more competitive, it said.

Chief executive Franco Bernabe, named in December, has promised more efficiency and better customer care to stem a decline in profits.

He is struggling with a mountain of debt. The result of three leveraged buyouts in 10 years, the debt pile of more than €35 billion towers over Telecom Italia’s market capitalization of €25 billion.

Bernabe has put the French broadband unit, Alice, on sale but he has little else to cede.

Previous management already sold businesses across Europe and Latin America to finance the debt and pay dividends, reducing a global company to an Italian company with large mobile phone operations in Brazil and a broadband unit in Germany.

The job cuts show he needs to change Telecom Italia to face stiffening competition in Italy as broadband companies such as Fastweb, taken over by Swisscom last year, win a greater share of business.

While Telecom Italia failed to stem its decline, other large European former monopolies such as France Telecom and Deutsche Telekom have been able to hold the line or increase sales even in mature markets in western Europe.

   

 

FT forms mobile internet joint venture with Nokia

  • May 22nd, 2008
  • 2:47 pm

France Telecom (FT) and Nokia have agreed to form a joint venture to provide internet services on mobile phones in eight European countries. Under the deal FT’s Orange mobile division will supply its mobile music store, while the vendor will provide a digital mapping application (Nokia Maps) to enable location-based advertising and search services to be delivered to Orange’s mobile subscribers. In addition, both firms will supply video games (both Orange and NGage games) and customers will be charged for services used through their standard monthly bill, side-stepping the need for any credit card transactions. Full terms and conditions of the three-year deal were not disclosed.

   

 

 

SFR launches neuf Cegetel buyout offer

  • May 16th, 2008
  • 2:28 pm

French mobile operator SFR, backed by media and telecoms conglomerate Vivendi, has launched a formal public offer for rival French telecoms group neuf Cegetel, Dow Jones reports. SFR has reportedly submitted a filing with the country’s stock exchange watchdog AMF committing to acquiring the neuf Cegetel shares it does not already own for EUR35.90 (USD55.56) per share between 19 May and 13 June. The filing also confirmed SFR already owns 77.9% of neuf’s shares.

On 16 April SFR and parent company Vivendi announced they had received permission from the government to close the purchase of the stake held in neuf Cegetel by the Louis Dreyfus Group. SFR outlined a EUR4.4 billion deal to buy the alternative telco in December 2007. The SFR/neuf Cegetel tie-up will create France’s second largest operator and provide a credible competitor to dominant telco France Telecom.

   

 

 
 

Telenor eyes merger with TeliaSonera

  • April 30th, 2008
  • 12:27 pm

Creation of Nordic super-operator on the cards once again, but competition issues would likely derail any deal.
Telenor is considering a tie-up with TeliaSonera and has hired advisors to look at a possible deal, the newswires reported Tuesday, citing Swedish newspaper Svenska Dagbladet.

The paper, which did not name its sources, said the Norwegian incumbent has appointed Nordea and JP Morgan to analyse the situation, adding that the two telcos have already held talks.

Both Telenor and TeliaSonera declined to comment on the rumours.

The news comes two weeks after it emerged that France Telecom is interested in taking over TeliaSonera.

Having initially refused to comment, the French telco later admitted it has take exploratory steps towards TeliaSonera, describing the operator as potential strategic opportunity. It also expressed interest in other possible targets, including Telenor.

However, France Telecom has not made any formal bid.

While Telenor and TeliaSonera might appear to be a good fit culturally, a merger would face heavy scrutiny from competition bodies. Both companies have mobile operations in the other’s home market, and both offer mobile services in Denmark, for example, while there is also cross-ownership with their emerging market assets.

History is not on the side of a tie-up between the pair.

Sweden’s Telia agreed to merge with Telenor in October 1999, but the deal fell apart two months later as the two governments failed to resolve various issues surrounding the deal.

Telenor admitted to a second attempt in 2002. Following the tie-up between Telia and Sonera to create TeliaSonera, the Norwegian operator revealed that it had taken part in secret talks earlier that year over a possible three-way merger.

The path would be unlikely to be any smoother this time around.

The Norwegian government still holds a 53.97% stake in Telenor, while Sweden and Finland claim shares of 37.3% and 13.7% respectively in TeliaSonera.

Quoting Norwegian analyst firm SEB Enskilda, Reuters also noted that the Norwegian government would be unlikely to agree to the deal, since it would result in it losing some control of Telenor, as the telco would have to pay for part of the acquisition in shares.

   

KES7 billion for Kenyan Orange

  • April 19th, 2008
  • 9:16 am

France Telecom which, together with a Dubai-based Alcazar Capital Limited, secured a 51% stake in December 2007 in Telkom Kenya, plans to invest KES7 billion (USD115 million) in the telco during 2008. The majority of the funding will be spent on the company’s new wireless network which will be based on GSM technology and will operate under France Telecom’s Orange brand name. France Telecom CEO, Didier Lombard, said ‘We are investing in Kenya for the long-term because we believe it is one of the fast growing economies in the world’, and claimed the new network will be launched ‘very soon’. About 20% of the KES7 billion investment will go towards upgrading Telkom Kenya’s international broadband capacity and fixed line network.

   

 

 
 

Mauritius Telecom sees the future as Orange

  • April 19th, 2008
  • 9:10 am

Mauritius Telecom (MT) is to unite its subsidiaries Cellplus and Telecom Plus under the Orange brand used by 40% shareholder France Telecom. Along with the rebranding, MT will offer new services and tariffs including lower roaming charges, rate reductions on user-selected numbers, and faster internet access speeds. No cost has been attributed to the rebranding or service expansion. ‘The only thing I can say is that Orange participated largely in the cost of the launch of this change of names,’ said MT CEO Sarat Lallah at a press conference yesterday.

   

 

MobiFone to apply for 3G licence (Vietnam)

  • April 17th, 2008
  • 2:59 pm

VietNamNet Bridge reports that Vietnam Mobile Telecom Services (VMS), a division of incumbent telco Vietnam Post & Telecoms which operates cellco MobiFone, has announced that it will apply for a 3G licence next month. According to VMS General Director Le Ngoc Minh, the Ministry of Information and Communications (MIC) will begin its 3G licensing process in May. ‘We’ve almost fulfilled preparations for financial resources, and an infrastructural platform and management to offer 3G services in the near future,’ said Minh. MobiFone is presently collaborating with France Telecom to showcase the latter’s 3G services at an exhibition at the Phu Tho Stadium in Ho Chi Minh City, as part of the city’s ‘French Week’. France Telecom spokesman Anne Bouverot said, ‘We’re confident that our group has the right experience and expertise to become MobiFone’s strategic partner.’