MEX

Vodafone is preparing to make an unsolicited cash offer for SFR, the French mobile phone company controlled by Vivendi Universal, in spite of indications by advisers to Vivendi that the media group hopes to hold on to its stake. Analysts have estimated that any offer could be in the region of GBP 8b. Vodafone is likely to use a GBP 6.7b unused bank facility to fund the purchase, with any shortfall made up of additional short-term bank borrowings.

Vodafone is keen to gain control of SFR because France is the only big European market where it does not have a controlling stake in its mobile operations. However, it declined to comment further. The UK mobile operator owns 32% of SFR through a 20% direct stake and a 15% holding in Cegetel, the French telecommunications business that in turn owns 80% of SFR. Vivendi has a 44% stake in Cegetel.

A formal offer could be made before the end of the month. The mobile operator is understood to be waiting for the expiry of ‘lock-up’ rights between Cegetel’s shareholders, which also include BT Group with 26% and SBC Communications of the US, which has 15%. The rights, which prevent any sale of shares without the full agreement of all investors, expire on September 23.