France Telecom close to walking away from TeliaSonera proposal

9 Jun 2008

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, Sweden, Orange Group, Telia Company