Maroc Telecom Sale Draws Bids From Qatar Telecom, Etisalat

Vivendi SA (VIV), the French media and telecommunications group that has put its 53 percent stake in Maroc Telecom SA (IAM) on the block, attracted bids from two Middle Eastern carriers by today’s deadline.

Emirates Telecommunications Corp. (ETISALAT), better known as Etisalat, and QSC Qatar Telecom submitted binding offers, the companies said in separate statements. Vivendi, whose holding has a market value of about $6 billion, said it will examine two proposals in the coming weeks, without identifying the bidders.

The stake sale is part of Vivendi’s plan to refocus on media and content distribution, rather than telecommunications, after Chairman Jean-Rene Fourtou and the board decided last year to sell assets instead of splitting the Paris-based company in two. South Korea’s KT Corp. (030200), which had expressed interest in the Maroc Telecom stake, said April 15 it had dropped out because of “big differences” in valuation.

“The critical event is not the sale price,” said Saeed Baradar, an equity sales specialist at Societe Generale in London. At market value, proceeds from the stake disposal “should be sufficient to reset the debt to allow Vivendi to split itself up into media and telecoms entities and to erode the current conglomerate discount in the share price.”

Photographer: Simon Dawson/Bloomberg

Emirates Telecommunications, better known as Etisalat, has secured funding from local and international banks, it said today. Close

Emirates Telecommunications, better known as Etisalat, has secured funding from local... Read More

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Photographer: Simon Dawson/Bloomberg

Emirates Telecommunications, better known as Etisalat, has secured funding from local and international banks, it said today.

Vivendi’s stock rose 2.7 percent to 17 euros at the close of trading in Paris. It has gained about 34 percent during the past 12 months.

GVT Sale

The French company has a market value of 22.5 billion euros, compared with net debt of 13.4 billion euros at the end of 2012. Fourtou is set to meet shareholders at an annual meeting on April 30.

Last month, Vivendi halted a planned disposal of GVT, its Brazilian phone and Internet unit, after failing to get satisfactory bids for a business it valued at more than $10 billion. The owner of Universal Music Group, video-game maker Activision Blizzard Inc. (ATVI) and Canal Plus has weighed a spinoff of its largest unit, French wireless carrier SFR, people familiar with the matter said last month.

Etisalat shares jumped 4 percent in Abu Dhabi. The company said it may end up owning a greater than 53 percent stake in Maroc Telecom because of local rules that require it to make a mandatory offer for minority shareholders. Morocco’s government, which has a 30 percent holding, has to be on board with any transaction.

Loan Terms

People with knowledge of the matter said last week that Etisalat was setting terms of $8 billion of loans backing its bid. Etisalat is raising debt comprising a $4 billion portion to be refinanced by bonds, and three- and five-year loans, the people have said.

Two years ago, Etisalat ended talks to buy a majority stake in Zain, Kuwait’s biggest phone company, for $12 billion. Etisalat today reported first quarter net income after royalties of 1.8 billion dirhams ($490 million), missing analysts’ estimates.

Maroc Telecom rose 1.4 percent to 110 dirhams in Casablanca. The carrier makes about 75 percent of its revenue in Morocco, where it is the largest phone company, and owns assets in Mali, Burkina Faso, Gabon and Mauritania.

Qatar Telecom, which operates under the brand name Ooredoo, added 0.6 percent to 113 riyals in Doha.

To contact the reporters on this story: Marie Mawad in Paris at mmawad1@bloomberg.net; Robert Tuttle in Doha at rtuttle@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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