France Tel to bid for Wanadoo
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PARIS, France (Reuters) -- France Telecom said on Monday it would launch a bid to buy out minority shareholders in Europe's No. 2 Internet service provider Wanadoo, of which it already owns 71 percent.
The bid values Wanadoo at around 13 billion euros ($16.46 billion).
France Telecom said in a statement it would offer seven France Telecom shares and 195 euros for 40 Wanadoo shares. It would also offer a subsidiary cash-only deal of 8.86 euros per share, and a stock-only deal of seven France Telecom shares for 18 Wanadoo shares.
The state-controlled telecom company said it planned to float Wanadoo's phone-directory business in the second quarter of 2004, and that, depending on the outcome of the offering, this could add a premium to the Wanadoo offer.
The offer would run from March 9 to April 13, France Telecom said, adding it would lodge the bid with France's market regulator on February 25 and expected to get the green light on March 5.
France Telecom said the deal was a "major step'' in the development of its high-speed Internet strategy and would integrate Wanadoo's Internet-access and portal activities, and said the cash-only version of the deal represented a 17.2 percent premium to Friday's closing price of 7.56 euros.
France Telecom, which swung back to profit last year after massive restructuring aiming to fix its debt-heavy balance sheet, said the phone-directory flotation would cancel out the costs of the deal, meaning it would be cash neutral.
The company also said that Wanadoo shareholders who tendered their shares to the offer would receive France Telecom's 2003 dividend payout, which it has said will be 0.25 euros.
Speculation over the buyout had swirled in the market over recent weeks. France Telecom had not denied plans for such a deal but said earlier this month it was not imminent.
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