The Perils of Pauline, Days of Our Lives and Crossroads have nothing on the convolutions of France’s attempt to sell Compagnie Generale des Constructions Telephoniques into the private sector – and, as in a good Five Nations rugby international decider involving the mercurial French side, the ultimate winner is still anyone’s guess. Latest twist in the saga is that the French treasury, which changed the rules late in the game to insist that the buyer must be 80% French, is now questioning whether the consortium put together by AT&T-Philips Telecommunications meets this criterion. AT&T-Philips proposes to take a direct 20% stake in CGCT, and additionally to take 20% of a newly-formed holding company that will bid for the rest. Despite the apparent contradiction, that is permitted under the rules. The treasury’s problem is with the identity of five of the other investors in the consortium. They are unit trusts managed by two banks, Algemene Bank Nederland and Morgan Guaranty Trust Co, and while most of the unit-holders in the trusts are French, the two banks very definitely are not – and they together account for 40% of the bid. AT&T says that if necessary it will alter the make-up of its consortium, but according to the Wall Street Journal, over-agressive proselytising for its technology by AT&T has begun to get up the noses of French officials, and although still just the favourite it has therefore fallen back a few points in the betting. The treasury also has difficult questions for two of the other bidders, Northern Telecom and Italtel, which don’t have full consortia in place. A final decision is promised by April 30.
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