UPDATE:Vivendi Offers EUR2.5 Billion For Deutsche Tel PTC Stake
PARIS -(Dow Jones)- Vivendi, Tuesday said it has made a EUR2.5 billion bid for Deutsche Telekom's 49% stake in Polish mobile-phone operator Polska Telefonia Cyfrowa.
It's the latest twist in an ongoing bitter battle between the two companies for ownership of PTC.
"We have offered to buy out Deutsche Telekom's stake in the Polish PTC for EUR2.5 billion," a Vivendi spokesman said, declining further comment.
Deutsche Telekom could not immediately be reached for comment.
The two companies can't even agree on what percentage each other owns. Deutsche Telekom lays claim to what is essentially full ownership of PTC and has been wrangling with Vivendi in both Polish and Austrian courts for several years.
Vivendi may have become impatient with the court process and aim to quickly resolve the dispute, a Paris based analyst said.
"Vivendi said a year ago it wanted to resolve this quickly and spend EUR800 million on DT's stake," the analyst said. "They are raising their offer because this dispute is not resolving quickly at all."
He adds that the price Vivendi is offering Deutsche Telekom is high but still within acceptable limits.
"It (buying PTC) falls squarely in their competence," he says. "Vivendi should be a telecom company."
The European Commission gave Deutsche Telekom clearance to take a majority holding in PTC in October 2004, just one twist in a three-sided battle for control of the operator that has raged since 1999.
Vivendi says it holds a stake in PTC through holding companies including Elektrim Telekomunikacja. Elektrim Telekomunikacja is jointly owned by Vivendi and the Polish conglomerate Elektrim.
Deutsche Telekom, citing a 2004 ruling by the Vienna international arbitration court, states that the transfer of shares in PTC from Elektrim to Elektrim Telekomunikacja is "null and void" and that Elektrim had always been the owner of the shares.
This is key because the Vienna ruling empowered Deutsche Telekom to exercise an option to buy PTC shares from Elektrim at book value, which could be as little as EUR350 million.
Elektrim dropped its objections to Deutsche Telekom's exercise of the option and effectively ceded control of PTC to the German operator in June. The Polish conglomerate is now negotiating with Deutsche Teleom on PTC's valuation.
The Elektrim-Deutsche Telekom rapprochement has left Vivendi to fight alone against what it argues is faulty interpretation of the Vienna ruling, which Vivendi says does not apply to its indirect PTC stake held Elektrim Telekomunikacja.
It insisted the original agreement between Deutsche Telekom and Elektrim had been reached "in violation of Polish court rulings." That means the Vienna decision "can have no effect in Poland at this time," it said.
--By Nina Sovich, Dow Jones Newswires; + 33 1 40 17 17 55; nina.sovich@dowjones.com
(David McQuaid in Warsaw contributed to this article.)
(END) Dow Jones Newswires"
Posted to the site on 26th September 2006