Vodafone looks set to up its bid for Cegetel, in an attempt to gain a large foothold in the French mobile market. Cegetel owns an 80% stake in operator SFR. At present Vodafone holds a 15% share in Cegetel, but it wants to acquire the remaining 85%. The group has increased its bid to GBP9 billion from GBP8 billion.
This has sparked a few fears among Vodafone shareholders, since the company would pay for the acquisition in cash and debt rather than in shares – raising its debt to over GBP20 billion. The company is likely to justify the move as a key European expansion strategy.
It is also rumored that troubled media group Vivendi Universal (holder of 44% of Cegetel) could embark on a bidding war with Vodafone to increase its stake in SFR – however, this looks unlikely.