The media group Vivendi Universal yesterday upped the ante for control of the French telecoms company Cegetel by taking the UK mobile phone operator Vodafone to court in a bid to gain more time to mount an attack.
Vodafone, which owns 15 per cent of Cegetel and has launched a bid for the balance of the shares including Vivendi's 44 per cent stake, confirmed it had been served with a writ which will be heard in Paris' Commercial Court on Monday.
The move came as Vodafone took the covers off its new Vodafone Live! service, which offers customers features like picture messaging, games and instant messaging on a new range of devices selling for about £200. Its shares closed up 7.6 per cent at 106p.
Sir Christopher Gent, Vodafone's chief executive, said that Vivendi was arguing it had the right to extend a 10 November deadline – the latest date by which the French group can make an offer for the Cegetel shares – by an extra 30 days.
But he stuck to his guns, saying: "If Vivendi wishes to pre-empt, they'd better pre-empt before 10 November. Any pre-emption after that date we'd consider to be invalid."
Vivendi desperately needs extra time to raise cash for its Cegetel bid and to allow it to make more disposals. Last week, Vodafone agreed to pay BT €4bn (£2.5bn) for its 26 per cent stake in Cegetel and offered SBC Communications of the US €2.3bn for its 15 per cent holding. A shareholder agreement stipulates that Vivendi can make a counter-offer for both stakes but must offer SBC a 13 per cent premium.
Sir Christopher also shot down claims that Vivendi, already weighed down by about €19bn of debt, could set up a special vehicle to seize control of Cegetel without having to increase its own debt. "Under the shareholders' agreement, they can't do an off-balance sheet [transaction]. It has to be owned by Vivendi," he said.
Vivendi is believed to be in talks with a consortium of banks about financing for a Cegetel bid, which would place the telecoms business in a holding company structure, with debt financed from its cash flow.
A Vivendi source said the acquisition of Cegetel would be a "no brainer", were it not for the company's debt issue because it is regarded as a key strategic asset with strong cash flow – the loss of which would severely dent Vivendi's earnings.
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