PARIS — France Telecom has made an unexpected bid to acquire part or all of the cable operations of French utilities giant Generale des Eaux (CGE).
The move, announced by France Telecom president Michel Bon at an industry conference last week, comes against a background of continued negotiations for Time Warner and Canal Plus to buy up the majority of CGE’s stake in its loss-making Compagnie Generale de Videocommunication (CGV) cable subsid.
At stake is a cable operation that currently has about 345,000 subscribers, but that posted losses of $51 million in 1996 and is swimming in red ink again this year.
Sources say France Telecom could be willing to meet CGE’s asking price — believed to be around 600 million francs ($103 million) — while also taking on part of the cable division’s $241 million debt.
In contrast, Time Warner’s offer to take a 35% stake in CGV would boost its existing 20% stake and is believed to hinge on Generale des Eaux chairman Jean-Marie Messier agreeing to hold on to all the cable debt. Messier is unloading his cable interests as part of his overall strategy to lighten debt loads and dump non-core businesses.
If France Telecom assumes the cable operation, it will be the dominant cable operator in France, with some 785,000 subscribers.