France Telecom has offered 252.5 billion kronor (€27.08 billion) to buy Sweden's TeliaSonera AB and create the world's fourth-biggest telephone company.
The cash and stock offer values TeliaSonera at 56.23 kronor a share, France Telecom said in a statement today. The price is 26 per cent higher than TeliaSonera's closing stock price on April 15th, the day before France Telecom's interest in buying TeliaSonera became public.
Buying TeliaSonera would be Paris-based France Telecom's biggest deal since it bought Orange £27.8 billion (€35.15 billion) in 2000. France Telecom's shares have fallen 13 per cent since its interest in TeliaSonera became known, on concern it would issue new stock to pay for the purchase.
"That's a pretty steep premium and to be honest I don't see the logic behind it," said Chris-Oliver Schickentanz, head of company research at Dresdner Bank AG in Frankfurt. "There will be some minor synergies in Spain but other than that nothing significant."
France Telecom chief executive officer Didier Lombard previously said the company was seeking growth in emerging markets including Vietnam and Ghana, where mobile-phone use is growing faster than in the operator's main markets of France and the UK. The company has said it would stick to debt-ratio targets and its cash dividend policy.
France Telecom will pay in cash for 52 per cent of TeliaSonera's shares, and 48 per cent in stock. It will offer three new France Telecom shares for 11 TeliaSonera shares, with a cash guarantee option for the first 500 shares.
The combined company would have 237 million subscribers, of which 168 million would be mobile-phone users and 69 million would be fixed-line customers.
Bloomberg