|
||||||||
  |
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||||||
Vivendi surges as concerns fade
PARIS, France (Reuters) -- Media giant Vivendi Universal's shares surged on Wednesday after the French-American group soothed lingering concerns over its move to take control of France's Cegetel and a credit ratings agency welcomed the deal. Standard & Poor's said Vivendi's decision to buy BT Group's stake in Cegetel was positive from a credit standpoint given that the deal was being funded by the sale of shares in utility Vivendi Environnement and a convertible bond. Vivendi Chairman Jean-Rene Fourtou, who has been selling assets to slash a 19 billion euro ($18.98 billion) debt pile, also comforted analysts on a conference call, saying his priority remained to cut debt and boost cashflow. After an initial dip, Vivendi shares forged more than seven percent higher as investors warmed to the four billion euro Cegetel deal. The stock was trading six percent up at 16.52 euros in Paris at 1030 GMT.
"S&P's comments are very positive for the stock. We were all worried at first about Vivendi buying BT's Cegetel stake but Vivendi is emphasising Cegetel is a cash cow and they could still cut their debt,'' said one London-based trader. Vivendi said on Tuesday it was exercising its right under a shareholder agreement to buy BT's 26 percent stake in French telecoms firm Cegetel, taking its holding to 70 percent in a move to fend off a rival offer from Vodafone Group Plc. The deal secures control of Cegetel's plentiful cash-flow. However, some investors had been nervous about Vivendi making an acquisition so soon after coming close to collapse this year. "Fourtou's comments relaxed the market. He was basically saying that Cegetel was a cash cow and cashflow was taking precedence over EBITDA,'' said a Paris-based trader. Since July, Fourtou has sold Vivendi's publishing empire and started a retreat from the group's original water business Vivendi Environnement in a drive to slash debts. Vivendi said the Cegetel deal would not alter its goal of selling 16 billion euros of assets by the end of 2004 and reducing its debt below eight billion euros by the same date. Vivendi said on the analyst conference call that its priority now was to see net income and cash flow, rather than EBITDA (earnings before interest, tax, depreciation and amortisation), increase in the coming years.
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||
