Vivendi SA (VIV) is in talks to sell its stake in Maroc Telecom SA to Emirates Telecommunications Corp. (ETISALAT) after Qatar Telecom QSC withdrew its offer.
Qatar Telecom, which sells its products under the brand name Ooredoo, is withdrawing its offer because of “a lengthy process,” it said today in an e-mailed statement.
Negotiations with Etisalat, as Emirates Telecommunications is known, are moving forward, according to two people with knowledge of the talks. While the two sides are optimistic an agreement will be reached, they aren’t yet close to signing a final deal, one of the people said.
Both Etisalat and Ooredoo made binding offers in April to buy Vivendi’s 53 percent stake in the Moroccan phone company. Vivendi’s share has a market value of 46 billion dirhams ($5.5 billion). Vivendi is targeting a completion of the stake sale by October, people familiar with the matter have said.
While Vivendi wants as much as 5 billion euros ($6.7 billion) for the holding, according to one person briefed on the matter, a more realistic target would be in the range of 4 billion euros to 4.5 billion euros, two other people with knowledge of the sale have said.
Completing the sale of Maroc Telecom also means getting the government of Morocco, the unit’s second-largest shareholder after Vivendi, on board for a transaction.
A Paris-based Vivendi representative declined to comment on the process. Ahmed Bin Ali, Etisalat’s senior vice president of corporate communications, declined to comment in an e-mail.
“Although Maroc Telecom represents a good fit for our global portfolio, it is no longer in the best interests of our shareholders to continue to commit capital to what has become a lengthy process,” Ooredoo Chief Executive Officer Nasser Marafih said in the statement.
Completing the sale of Maroc Telecom will help Vivendi Chairman Jean-Rene Fourtou show investors he can close asset sales. Attempts to divest Brazilian Internet operator GVT and a stake in game publisher Activision Blizzard Inc. failed because of valuation differences or insufficient interest, leading the 73-year-old Frenchman to renew his pledge to undertake a full strategy review of Vivendi.
The Maroc Telecom stake sale is also likely to divert attention from Vivendi’s biggest unit, SFR, also its largest contributor to group sales and profits. The French phone company is trying to fend off low-cost offers by Iliad SA as price wars enter their second year in the French wireless services market. Fourtou has said reinforcing business at SFR is the first step to a possible initial public offering of it.
The French conglomerate also owns music company Universal Music Group Inc. and French pay-television company Canal Plus.
Shares of Vivendi climbed as high as 17.44 euros in January since CEO Jean-Bernard Levy was ousted in June 2012, though they have since pared their gains. The stock has gained about 7 percent in the past 12 months.
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