Viv U mulls utility sale
Conglom has until Nov. 10 to preempt offer or lose control
Viv U owns 44% of the telco, but in a move that sparked mayhem at the cash-strapped conglom last week, Blighty's Vodafone slammed $13.1 billion on the table to up its stake in Cegetel from 15% to 100%. Some $6.1 billion of the offer price would go to shareholders British Telecom Group and SBC Communications, and the rest to Viv U.
Viv U has until Nov. 10 to preempt the offer on the other stakes, or lose control of France's second biggest telecom player. It has a 40% stake in Vivendi Environment.
Dim view
Investors and analysts take a dim view of the prospect that Viv U might spend upwards of $4 billion on Cegetel -- flouting topper Jean-Rene Fourtou's pledge to slash the conglom's $19 debts.
Buying the Cegetel stakes would immediately mop up the $3 billion that Viv U is expecting to get from the imminent sale of its publishing arm, VUP -- and then some.
The $6.7 billion from Vodafone would significantly reduce liquidity pressure on Viv U and allow the conglom to pursue its target $10 billion asset sales over the next two years at its own pace.
But sources in Paris Tuesday suggested that Fourtou was ready to spend to retain control of the lucrative telco, whose mobile subsid SFR is expected to post earnings of $2 billion this year.
Former Viv U topper Jean-Marie Messier came under fire from the French government when he suggested selling off Vivendi Environnement earlier this year, but officials have reacted more favorably to Fourtou's proposal, Le Monde said.
