Vivendi Universal SA is more likely to bid for France's second-largest phone company after a court granted its request for additional time to thwart an offer made by Vodafone Group Plc, analysts said.
The commercial court of Paris Monday gave the world's second-largest media company an extra month to make a bid for Cegetel SA after Vodafone offered 13.1 billion euros (US$12.9 billion) for the French phone company.
Vivendi has been weighing whether to raise its 19 billion euros of debt to retain control of its most profitable asset or accept Vodafone's 6.8 billion-euro offer for its 44 percent stake in Cegetel. Cegetel accounts for about a third of Vivendi's operating profit.
"It gives Vivendi more time to get some more financing and draws the process out," said Andrew O'Neill, an analyst at research firm Sanford Bernstein & Co. "But I don't think it will change the outcome or prompt Vodafone to raise its offer."
Vivendi shares fell as much as 5.3 percent to 12.69 euros and were trading at 12.90 euros as of 10:05am on the Paris stock exchange. Vodafone shares fell 0.93 percent to 106 pence in London. The court decision was released after French and UK markets had closed yesterday.
Vivendi sued Vodafone to extend a Nov. 10 deadline to make an offer for Cegetel. The court ruled that the media company should be given until Dec. 10. Vivendi, whose board meets today, has until tomorrow to decide whether to accept Vodafone's offer.
Vodafone, Europe's largest mobile-phone company, offered to buy the 85 percent of Cegetel it doesn't own, including Vivendi's stake, earlier this month. Vivendi has the right to counter Vodafone's offer to Cegetel partners BT Group Plc and SBC Communications Inc.
To finance a bid, Vivendi may sell its Boston-based publishing business Houghton Mifflin Co or its 41 percent stake in Vivendi Environnement SA, the world's largest water utility. It may also be able to convince banks to give it a loan backed by its stake in the phone business, analysts have said.
The Paris-based company may be forced to sell the Cegetel stake after Societe Generale SA, one of its main banks, expressed reservations over the buy out plan, Les Echos newspaper said today citing no one.
Vodafone spokesman Bobby Leach today reiterated the company is awaiting the written ruling from the court before making any comment. Last week, Chief Executive Officer Christopher Gent said Vodafone would abide by the ruling.
BT spokesman Mike Bartlett declined to comment.
SBC spokesman Russell Johnson said his company had no immediate comment. Vivendi didn't comment following the court ruling.
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