TeliaSonera Rejects $42bn Bid From France Telecom

TeliaSonera and the Swedish government, the Nordic phone company’s largest shareholder, have rejected a SEK 252.5bn ($41.9bn) offer from France Telecom, stating that the offer “significantly undervalues the company”.

The bid values TeliaSonera at SEK 56.23 a share ($9.28), 26% higher than the price on April 15, the day France Telecom’s interest in a deal with the company became public.

A merger between the two companies would create world’s fourth largest telecom operator behind US carriers AT&T, Verizon, and Japan’s NTT, and would make France Telecom Europe’s largest carrier. Currently Deutsche Telekom is Europe’s biggest phone company, followed by Spain’s Telefonica.

Didier Lombard, chief executive at France Telecom, said he hopes to wrap up a deal with TeliaSonera by the end of the year. He said it would accomplish two of France Telecom’s objectives: expanding into mature markets, and exposing France Telecom to more emerging markets.