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Vivendi wins time for Cegetel bid
PARIS, France (CNN) -- Vivendi Universal has won more time from a French court to raise money for a possible challenge to Vodafone's plans to buy a controlling stake in the country's second biggest phone company. The court ruled late on Monday that Vivendi -- the world's number two media group after CNN parent AOL Time Warner -- can have an extra 30 days to respond to Vodafone's 13.1 billion euros ($12.8 billion) bid to buy out its partners in telecom group Cegetel. The decision gives Vivendi, faced with a 19 billion euro debt pile, breathing space to find the cash for a counter bid. Vodafone announced on October 16 it had reached an agreement with BT Group and SBC Communications to buy their stakes in Cegetel in an all-cash deal valued at 6.3 billion euros ($6.2 billion). The London-based group would pay 4 billion euros ($3.9 billion) for BT's 26-percent stake in Cegetel and $2.27 billion for the 15-percent interest held by SBC, the U.S. telecommunications group. Vodafone, which already owns 15 percent of Cegetel, also offered to buy Vivendi's 44-percent holding in Cegetel for 6.77 billion euros. The deal would give Vodafone, Europe's biggest mobile phone operator, a 56-percent stake in the French telecommunications group and SFR, the mobile company 80 percent owned by Cegetel. Vivendi (PEX) was down 3.7 percent to 12.90 euros in mid-morning Paris trading on Tuesday, while Vodafone (VOD) fell 0.7 percent to 106.25 pence in London. Analysts say Vivendi is keen to keep and perhaps raise its stake in Cegetel, which is providing a steady flow of much-needed cash to the Paris-based group. "This delay creates additional uncertainty, Vivendi has to either find the additional funding to expand, or attempt to negotiate a higher price from Vodafone which is far from certain," investment bank Bear Stearns said in a note. "Should Vivendi not acquire the funding, which at this stage is not certain, Vodafone could chose not to acquire Vivendi's stake and therefore overall control could be achieved at a lower original cost to Vodafone." Vivendi launches asset saleIn September, Vivendi said it planned to auction assets valued at 12 billion euros by the end of 2003 in an effort to pay down its debt. Last week, it raised 1.25 billion euros from the sale of non-U.S. publishing assets and is discussing whether to sell its U.S. publisher Houghton Mifflin for about 1.75 billion euros. Earlier this month, Vivendi agreed to sell its loss-making Italian pay television unit Telepiu to Rupert Murdoch's News Corporation in a long-awaited deal worth about 900 million euros. News Corporation is paying 470 million euros in cash for Telepiu and assuming 423 million euros of its debt.
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