Bloomberg News

France Telecom Swiss Sale Said to Exclude Rival Owner CVC

September 20, 2011

(Adds Bain Capital in third paragraph.)

Sept. 20 (Bloomberg) -- France Telecom SA’s effort to find a buyer for its mobile-phone unit in Switzerland excludes CVC Capital Partners Ltd., the owner of a Swiss rival, due to possible antitrust hurdles, two people with knowledge of the matter said.

Details of the sale were sent to potential bidders for Orange Switzerland last week, with first-round bids due in mid- October, the people said, declining to be identified because the talks are private. CVC, which bought Swiss operator Sunrise last year, didn’t receive documents, they said.

Private-equity firms including Apax Partners LLP, and EQT Partners as well as cable operator Liberty Global Inc. are among companies considering bids in a sale that may fetch about 2 billion euros ($2.7 billion) for Paris-based France Telecom, people familiar with the matter said last month. Providence Equity Partners and Bain Capital LLC may also make offers, according to two people with knowledge of the matter.

France Telecom declined to comment. A spokesman for CVC wasn’t immediately available to comment.

CVC will only be allowed to bid by agreeing to acquire Orange without conditions and assuming responsibility for winning regulatory approval of a possible merger with Sunrise, the people said. Competition regulators last year blocked a proposal by France Telecom and Sunrise’s previous owner, Denmark’s TDC A/S, to merge their Swiss businesses.

France Telecom shares rose 1.9 percent to 12.02 euros in Paris trading today, valuing the company at 31.8 billion euros. The stock has declined 23 percent this year.

Congo Deal

France Telecom Chief Executive Officer Stephane Richard is looking to shed European assets to focus on expanding in the Middle East and Africa, where sales are growing at almost 10 times the pace of some European markets. The company is nearing a deal to enter the Democratic Republic of Congo, one of Africa’s poorest countries, by buying local operator Congo-China Telecom, people familiar with the situation said last week.

A combination of Orange Switzerland with Sunrise would leave the country of about 8 million residents with two mobile operators: the merged entity and Swisscom AG, the former Swiss phone monopoly. By comparison, the U.K., Germany and Italy all have four full-service mobile-network providers.

--With assistance from Anne-Sylvaine Chassany in London. Editors: Kenneth Wong, Simon Thiel.

To contact the reporters on this story: Jacqueline Simmons in Paris via jackiem@bloomberg.net; Matthew Campbell in Paris via mcampbell39@bloomberg.net

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


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