France Telecom to buy Equant

24th January 2005, Comments 0 comments

PARIS, Jan 24 (AFP) - The French telecommunications operator France Telecom wants to buy the 46 percent of business telecom-services unit Equant it does not already own, the group said on Monday, marking another step in its general integration strategy.

PARIS, Jan 24 (AFP) - The French telecommunications operator France Telecom wants to buy the 46 percent of business telecom-services unit Equant it does not already own, the group said on Monday, marking another step in its general integration strategy.

Equant shares leapt on the news, gaining 17.22 percent to EUR 4.22 in early trading on the Paris stock exchange, where the CAC-40 index of leading shares was down 0.30 percent overall.

France Telecom offered EUR 564 million (USD 735 million) in cash for the stake, a premium of 16.7 percent compared with Equant's closing share price on Friday, the telecoms operator said in a statement.

"This decision makes sense on a strategic level and aligns Equant's objectives with those of France Telecom," Merrill Lynch brokers said in a statement.

Equant has lost money since 2000, when new technologies and competition began to undercut prices just as clients were hit by a collapse in Internet activities.

The company said on Monday that it would "deal with a very difficult 2005, which combined with a five-year plan aimed at medium-term profitability, would lead to a strong depreciation of assets".

France Telecom, meanwhile, has begun to reintegrate formerly independent divisions, a move that facilitates the restructuring of troubled subsidiaries.

France Telecom said it would provide Equant with EUR 250 million credit line in light of expected losses over the next few years.

Last year the parent group repurchased minority stakes in its mobile operator Orange and Internet service provider Wanadoo.

© AFP

Subject: French News

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