Cracks showing in FT's bid for TeliaSonera

Despite some analyst support for France Telecom's (FT) bid for TeliaSonera, there are growing signs that it might need to look elsewhere, with Brussels-based Belgacom being put forward as a more tolerable alternative. The major hurdle for FT is the downward slide of its share price since rumours surfaced mid-April of a likely bid--the shares have slipped 17 per cent in this two-month period.

Further complications have arisen with fresh speculation that Telenor might make a bid for TeliaSonera, albeit that this plan would likely collapse under the weight of regulatory obstacles, a backlash against Nordic job losses and political complications.

FT's financial director, Gervais Pellissier, has taken an aggressive line with respect to the bid by threatening to walk away from its proposed €26.5 billion takeover of TeliaSonera unless the operator rapidly signaled its interest in a tie-up. Pellissier also admitted that FT could withdraw its offer if its share price started to plunge amid continuing uncertainty over a deal. However, Ovum's John Molony has painted a more positive picture of the strategic reason for a merger between FT and TeliaSonera.

For more on this story:
- read AFX News , The FT and Ovum's analysis

Related stories:
FT may dump TeliaSonera bid. FT bid story
What's behind FT's interest in TeliaSonera and Telenor? FT/TeliaSonera story