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France Telecom execs wanna buy all of Wanadoo

Telco eyes buy up of remaining 30 per cent of ISP
Written by Jo Best, Contributor

Telco eyes buy up of remaining 30 per cent of ISP

France Telecom has announced that it wants 100 per cent control of ISP Wanadoo and intends to buy up the shares in the company that it doesn't hold.

The spending spree could see the French telco buy up the outstanding 30 per cent share of the ISP - which owns UK service provider Freeserve - in a cash and shares bid that will cost nearly €4bn. It's thought the move comes in response to the global fall in earnings from fixed line phones, which dropped nearly 6 per cent last year, and is an attempt by France Telecom to recoup some of the difference from internet growth, as well as bolster its share of the broadband market across the Channel.

If the buy-up goes according to plan, France Telecom said it may consider a partial IPO of its Pages Jaunes business, which is the French equivalent of the Yellow Pages directory, possibly in the second quarter of this year.

Last year, Wanadoo posted revenues of €159m after making its first profit in 2002, while France Telecom brought in revenues of €3.2bn after two loss-making years. The Paris stock market's reaction to the news was mixed - shares in the ISP rose by more than 15 per cent yesterday, while the telco's fell by more than 2 per cent.

France Telecom announced a similar share buy-up for mobile operator Orange last year.

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