Vivendi denies in talks for Reliance Comm stake
Thursday, 24 June 2010
PARIS/MUMBAI, June 23 (Reuters): Vivendi, Europe's largest entertainment group, said Wednesday it was not in talks to buy a 26 percent stake in Indian mobile carrier Reliance Communications.
Indian newspaper Economic Times said Vivendi, which has telecom operations in France, Morocco and Brazil, had been talking to Reliance for a month and discussions were at an advanced stage, citing a person with direct knowledge.
Reliance Communications, the No 2 mobile carrier in India's fast-growing market, is burdened by debt and the cost of rolling out third-generation (3G) services. It said earlier this month its board had agreed to sell up to 26 per cent of the firm.
The company has a market capitalization of 384 billion Indian rupees ($8.6 billion) and is majority owned by billionaire Anil Ambani's Reliance conglomerate.
Vivendi spokesman said the company was not in any talks with Reliance Comm.
But Vivendi shares were down 2.8 per cent by 0900 GMT, the leading decliners in a 0.7 per cent weaker European media index, as investors fretted the company might be considering going on the acquisition trail again.
"We think Vivendi has only 0.7 to 1.0 billion euros ($900 million to $1.3 billion) of headroom under its Baa2 rating and so has no capacity for a deal," UBS analyst Polo Tang wrote.
Indian newspaper Economic Times said Vivendi, which has telecom operations in France, Morocco and Brazil, had been talking to Reliance for a month and discussions were at an advanced stage, citing a person with direct knowledge.
Reliance Communications, the No 2 mobile carrier in India's fast-growing market, is burdened by debt and the cost of rolling out third-generation (3G) services. It said earlier this month its board had agreed to sell up to 26 per cent of the firm.
The company has a market capitalization of 384 billion Indian rupees ($8.6 billion) and is majority owned by billionaire Anil Ambani's Reliance conglomerate.
Vivendi spokesman said the company was not in any talks with Reliance Comm.
But Vivendi shares were down 2.8 per cent by 0900 GMT, the leading decliners in a 0.7 per cent weaker European media index, as investors fretted the company might be considering going on the acquisition trail again.
"We think Vivendi has only 0.7 to 1.0 billion euros ($900 million to $1.3 billion) of headroom under its Baa2 rating and so has no capacity for a deal," UBS analyst Polo Tang wrote.