Vodafone has confirmed that it is in talks with France's Vivendi Universal over the future of their joint venture wireless internet portal, Vizzavi. Vodafone says that these discussions may lead to an offer to acquire all or a part of Vivendi's shareholding in Vizzavi.
The move by Vodafone to take control of Vizzavi has been widely expected after Vivendi decided that it would no longer invest any more money in the loss making division, while Vodafone has said that it is willing to continue funding the operation. Vodafone is already set to take control of Vizzavi from Vivendi and the portal will be the key part of its move to support photo messaging in Europe. The company is preparing to re-launch the wireless side of the portal in October, with a whole new colour WAP service and will be supporting i-mode style third party content billing. Earlier this year, the portal cut 100 jobs in an effort to stem its losses.
Vivendi is currently desperate to reduce its US$10 billion debt, and while the sale of its stake in Vizzavi would be welcomed, the stake is not expected to be worth more than around US$150 million. Any deal with Vivendi needs to be concluded amicably if Vodafone is to be able to launch a takeover for the Vivendi controlled, Cegetel, which itself owns the French GSM network, SFR. It has been widely reported that Vodafone is preparing for a US$4.5 billion takeover of Cegetel, if it can persuade Vivendi to sell its 44% stake in the company. If Vodafone's talks with Vivendi result in Vodafone driving too hard a bargain, then it could jeopardize other talks that may be occurring regarding the company's desire to buy Cegetel. It maybe worth noting though that Vivendi's Chairman and CEO, JR Fourtou has denied in a letter to shareholders that there are any plans to sell its stake in Cegetel. He is even considering increasing the company's holding in Cegetel.
The two companies have invested over US$1 billion in the joint venture since it was created back in 2000, as a condition of securing Vivendi's agreement to Vodafone's takeover of Germany's Mannesmann.'"
Posted to the site on 18th August 2002
Posted to: www.cellular-news.com/story/7405.php