LONDON-Vivendi Universal is still convinced that Vodafone Group plc will come back with an improved offer for its stake in French operator Cegetel, after Vivendi rejected Vodafone’s initial $6.6 billion cash offer, even though there are no indications that a new bid is in the offing.
The outcome now hinges on which side can hold its nerve longest. On the surface, Vivendi would be more likely to crack first, given its high levels of debt, and its rival clearly hopes this situation will make it impossible for the company to raise the necessary finances.
However, sources at Vodafone said the company is concerned that Vivendi will acquire either SBC Communications Inc.’s or British Telecommunications plc’s stakes in Cegetel, and thus, maintain majority control of the company. Another worrying scenario for the U.K.-based mobile operator and minority shareholder is a Vivendi alliance with Belgacom, one of the few European operators with the balance sheet to support serious fund raising.
In addition, Vivendi knows that Vodafone is anxious to increase its presence in the French market.
Several industry analysts interviewed said accepting the current bid was the best option for Vivendi. Either way, it is likely that Vodafone’s chances of acquiring the French mobile operator will not become clear for another week or two.
Vivendi, which controls 44 percent of Cegetel, received a one-month extension from a Paris court to make a counteroffer for the Cegetel stakes. The new deadline is Dec. 10.
