Vivendi Universal SA’s gamble that it could force Vodafone Group Plc to come back with an improved offer for its 44% Cegetel stake has spectacularly failed, after the Newbury, UK-based company renewed its original offer of E6.77, which Vivendi rejected last week as too low.
Vodafone believes its cash offer represents a full and fair price for Vivendi’s Cegetel interests, the mobile operator said in a statement.
The renewed offer is a shrewd move by Sir Christopher Gent, CEO of Vodafone because it puts the onus firmly back onto Vivendi to either sell its Cegetel interests for an attractive amount of cash, which would go a long way to reduce its $18.6bn debt burden, or to find enough money to launch its own counter bid for the Cegetel stakes held by BT Group Plc and SBC Communications Inc.
Finding money to launch a counter bid is proving to be difficult for the financially weak Vivendi. Bankers have been reluctant to help it finance a counter bid, and so far it has raised disappointing amounts from recent asset sales, namely its publishing businesses. Investors would much prefer the Paris, France-based media giant accepts the money. However, the Cegetel stake is Vivendi’s cash cow, and CEO Jean-Rene Fourtou is known to be keen to hang on to it if he possibly can.
Vodafone’s renewed offer is valid until December 10, the same deadline by which Vivendi has to decide whether to make an offer for the Cegetel stakes held by BT and SBC.