The process leading to the partial privatization of state-owned France Telecom SA began yesterday with the opening of the period in which prospective shareholders can register their interest; and the government set a target price of between FF170 ($28.26) and FF190 ($31.58) per share for the sale of its 20% stake. That values the telco at between Ff170bn ($28.26bn) and FF190bn ($31.58bn), which is within analysts’ ranges, although the government’s previously-announced retention of around 63% of the company forced analysts to downgrade their estimates earlier. Some unions are still opposed to the sale, and the CGT and Sud unions have called a strike for September to protest, while other unions, such as Force Ouvriere and CFDT have called such action pointless. The French government will sell 75 million shares at a fixed price in the marketplace and offer another 155 million shares to French and foreign institutions, with an option to increase that last number by 10%. The banks handling the offer, led by Banque Paribas SA, have an optional 16 million further shares to offer to institutional investors. Also, 21 million shares will be sold to Telecom staff and former staff at advantageous prices. The final price will be set on October 6 and trading begins in Paris and New York on October 20. Subscribers for some of the 75 million shares on open offer must apply for a minimum of FF1,000 worth of share and private investors will get a 5% discount on the final institutional price. Applications will be taken from today and the offer will take place over a period of six days, to be announced soon. The valuation would make France Telecom the 12 largest telco in the world, ahead of US West Inc and behind Ameritech Inc. NTT Corp and AT&T Corp are the number one and two respectively.
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