Etisalat Extends Talks With Vivendi on Maroc Telecom

Emirates Telecommunications Corp., the Abu Dhabi-based phone operator, agreed to extend talks with Vivendi SA on a planned purchase of the French company’s stake in Maroc Telecom SA for 4.2 billion euros ($5.7 billion).

The exclusivity period to acquire the 53 percent stake in the Moroccan phone company was extended until Oct. 31, the company known as Etisalat said yesterday in a statement to the Abu Dhabi stock exchange. The previous deadline was Sept. 25.

Vivendi, bowing to investor pressure to overhaul its structure, is conducting a study to separate its French phone unit SFR and assemble the rest of its businesses into a new international media group based in France. Selling its telecommunications assets is a key part of Vivendi’s plans to transform into a new entity built around music, pay-TV, European cinema and Internet in Brazil.

The Maroc Telecom deal, expected to be finalized around the end of the year according to Vivendi, may be concluded by mid-November, Moroccan Foreign Affairs Minister Saad-Eddine El Othmani told reporters in Dubai this month.

The companies agreed to exclusive talks in July after Etisalat’s bid valued the stake at 3.9 billion euros, or 92.6 Moroccan dirhams per share. Etisalat also offered to pay 310 million euros for a dividend that Vivendi was set to receive from Maroc Telecom.

A deal would give Etisalat control over the largest mobile carrier in Morocco. Etisalat said it has commitments from a syndicate of local and international banks to finance the bid.

Activision Blockage

“Signing and closing of the transaction would be subject to a number of conditions,” Etisalat said in yesterday’s statement. They include shareholders agreement and obtaining competition and regulatory approvals, it said.

Vivendi slipped 0.7 percent to 17.02 euros at 9:31 a.m. in Paris. Etisalat rose 0.4 percent to 11.65 dirhams in Abu Dhabi. The stock has climbed 28 percent this year, compared with a 46 percent advance for the benchmark ADX General Index.

Vivendi is also divesting its stake in video-game maker Activision Blizzard Inc. Activision in July announced it would buy back $5.83 billion of its shares from its French parent, while a group including the unit’s director and top executive will pay $2.34 billion to buy more stock from Vivendi.

Vivendi is selling assets ahead of a final decision on a new structure early next year and expects to take plans to shareholders at its next annual meeting in the first half.

Divestments will leave Chairman Jean-Rene Fourtou with control of SFR as well as music company Universal Music Group, pay-television unit Canal Plus and Brazilian broadband provider GVT, as well as a reduced debt level. Taking into account asset disposals including Maroc Telecom and Activision, Vivendi’s net debt will drop to 6.5 billion euros from 17.4 billion euros as of June 30, the company said in August.

Vivendi shares have gained 9.9 percent during the past 12 months, valuing the company at 23 billion euros.

Before it's here, it's on the Bloomberg Terminal.