LONDON-France Telecom is expected to make a $45 billion cash and stock bid for Orange plc early next week, according to international press reports. The French telecom company is reported to have secured a $29.7 billion bank loan to acquire the United Kingdom’s third-largest operator and holder of a U.K. Universal Mobile Telecommunications System license.
Vodafone AirTouch plc must sell or de-merge Orange later this year as a condition of its merger with Mannesmann AG. Vodafone AirTouch most likely would prefer to sell Orange to help pay for the cost of its $9.4 billion U.K. third-generation license, won at auction earlier this month. In addition, Vodafone AirTouch last week postponed an initial public offering of its Australia-based Pacific operations because of market volatility.
The Financial Times reported France Telecom is in exclusive talks to buy Orange. Press reports also said France Telecom is set to sell 5.3 percent of its stake in Mexico’s telecom leader Telefonos de Mexico, which would raise about $1.9 billion.
However, rival bids could come from the Netherlands’ KPN Telecom, Finland’s Sonera or U.S.-based WorldCom Inc.
France Telecom was left out of the U.K. market last month when its NTL Mobile joint venture dropped out of the U.K. UMTS license auction. In addition, KPN thwarted the French carrier’s plan to expand into the German wireless market last year when the Dutch company, partnering with U.S.-based BellSouth Corp., topped France Telecom’s bid to buy E-Plus, Germany’s third-largest mobile carrier.
