February 9, 2011 / 4:40 PM / in 7 years

Vivendi, Vodafone talks underway on SFR stake

LYON (Reuters) - France’s second-biggest mobile operator SFR said on Wednesday its parent Vivendi was in contact with Vodafone regarding the acquisition of the British operator’s 44 percent stake in SFR.

<p>A Vodafone logo is seen on a mobile internet dongle connected to a laptop in London November 9, 2010. REUTERS/Suzanne Plunkett</p>

It added that price discussions were continuing.

“There are contacts, but the right price has yet to be found,” SFR Chief Executive Frank Esser said during a press lunch in Lyon, France.

“Each side has its own ideas about the value of the assets, and we need to reconcile these ideas,” a source with first-hand knowledge of the talks said on Wednesday on condition of anonymity.

“They need to get to an agreement on price, and there is no guarantee right now that they will.”

Vivendi said last month it had completed the sale of its stake in NBC Universal to GE, bringing in outstanding proceeds of $3.8 billion, replenishing its coffers to buy Vodafone’s SFR stake.

Vivendi sold its entire 20 percent stake in NBCU for $5.8 billion.

The French media group’s full ownership of SFR would cap Chief Executive Jean-Bernard Levy’s long-running efforts to put the Vivendi house in order after an ill-fated acquisition spree by his predecessor pushed it to the brink of bankruptcy.

It would also make Vivendi a more telecoms-focused group with a simpler structure and higher profitability.

“This is a very good thing for Vivendi to have 100 percent of SFR,” Esser said.

“After that, I am sure we will keep a commercial relation with Vodafone. We have good relations with them.”

Vivendi and Vodafone declined to comment on Esser’s comments.

Vivendi shares were down 0.6 percent at 21.02 euros, while Vodafone shares were up 0.25 percent at 180.05 pounds sterling by 1620 GMT.

Additional reporting by Astrid Wendlandt in Paris and Kate Holton in London; Editing by Will Waterman

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