Having made no real attempt to quash stories of its strong interest in merging with TeliaSonera, France Telecom (FT) has backed away claiming that no discussion had taken place, even though the Scandinavian telecoms operator remained 'interesting.' The fact that FT's share price plummeted on the rumours (investors indicated their worries about the risks involved) has not been referenced by FT executives.
But, not wanting to let the situation rest, FT's CEO, Didier Lombard, said that all the necessary conditions were still in place for the group to take part in the consolidation of the European telecoms sector.
Industry observers say the telecom industry is getting more confident about completing deals. They cite lower valuations, the potential acquirers' stronger balance sheets and the virtual disappearance of competition from private-equity firms. "It's actually encouraging for telecoms firms because they're not so concerned about private equity coming in and the price going up in a bidding war," said John Delaney, principal analyst at research firm IDC.
What's behind FT's interest in TeliaSonera and Telenor? FT story