- The Guardian, Tuesday July 1 2008
France Télécom yesterday abandoned its €27bn (£21bn) bid for Nordic rival TeliaSonera and, with it, the prospect of leading Europe's biggest telecoms group.
The French operator walked away after the TeliaSonera board and its biggest shareholder, the Swedish government, demanded a higher price.
The decision leaves TeliaSonera exposed, with its shares down 13% at 43.50 Swedish kronor (£3.65) - well below the indicative Skr56 French offer.
It is understood that the Nordic operator's board and the Swedish government, which owns 37.3%, were seeking a bid above Skr60 but the French ruled this out because it would have put at risk its debt-to-earnings ratio target - though it had offered to marginally "tweak" the cash element of its share-and-cash offer. France Télécom could instead return cash to its own shareholders who saw their stock rise 7% on the news.
Sweden's financial markets minister, Mats Odell, insisted his government would press ahead with reducing its stake as part of a privatisation programme.
Odell said: "TeliaSonera is the only big telecoms firm for sale. There are other interested parties and I am completely convinced TeliaSonera will be able to play a part in consolidation."
The Nordic operator's board said the French offer, "substantially undervalues the company".
Industry sources said TeliaSonera investors had shown substantial interest in the French offer but the board and government had dug their heels in.
