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France Telecom Offers to Buy Out Wanadoo

Posted on: Monday, 23 February 2004, 06:00 CST

France Telecom launched a $4.9 billion offer of cash and stock on Monday for the remaining 29.4 percent publicly-held portion of Wanadoo, a deal that would give the telecommunications concern full control over its directories and Internet services division.

The deal, which will be followed by a listing of Wanadoo's Yellow Pages directory business, will also enable the French state to reduce its stake in France Telecom to 50-51 percent from the current 54.5 percent.

France Telecom said the operation will help accelerate its new high-speed Internet strategy, which includes offering services, voice, data and images in one package.

Voice services are now handled by France Telecom while Internet subscriptions are marketed by Wanadoo.

The offer values Wanadoo at 13.25 billion euros ($16.56 billion), or 8.86 euros ($11) per share. Wanadoo shares were up 15 percent at 8.69 euros ($10.86) in trading in Paris while France Telecom shares were down 2.9 percent at 22.11 euros ($27.63).

The offer follows France Telecom's buyout of minority shareholders in mobile operator Orange last year.

France Telecom said its offer will be adjusted so that it eventually pays 55 percent of the total in cash and 45 percent in shares. The company expects the offer to begin on March 9, once it obtains approval from France's stock market watchdog.

France Telecom is also awaiting approval by Wanadoo's board, which should be obtained over the next eight days.

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