Vodafone to Seek Vivendi’s Stake in Cegetel

Vodafone Group is planning to offer $4.6 billion for Vivendi Universal’s stake in Cegetel, France’s second-largest phone company, the London Observer reported Sunday, citing people familiar with the situation.

Europe’s biggest mobile-phone company, which already owns 15% of Cegetel, told UBS Warburg and Goldman Sachs Group Inc. to approach Vivendi about buying its 44% stake in the phone company, the British newspaper said. The move would give Vodafone control of Cegetel’s mobile-phone unit, SFR.

Vivendi Universal, which ousted Chief Executive Jean-Marie Messier last week, is expected to sell some assets to pay off its huge debt, unwinding Messier’s $77 billion in takeovers, analysts have said. Vodafone CEO Christopher Gent has expressed interest in acquiring SFR.

Vodafone spokeswoman Melissa Stimpson declined to comment.

Cegetel owns 80% of SFR, with the rest held by Vodafone. The French company is profitable, with 12 million customers, the Observer said.

Vivendi’s stake in Cegetel may be worth $6.3 billion to $8 billion, according to estimates from analysts at J.P. Morgan Chase & Co. and Bear, Stearns & Co.

Vodafone could pay for the acquisition using existing credit lines, which wouldn’t lead to a cut in its credit ratings, the paper reported analysts as saying. Still, the Financial Times, citing a report by British stockbroker Collins Stewart Holdings, said Saturday that the company’s ratings may be lowered as a result of the purchase.

Vodafone has an A rating from Standard & Poor’s Corp. and an A2 rating from Moody’s Investors Service.