Vodafone poised for £3.8bn swoop

VODAFONE is believed to be ready to table a £3.8bn cash offer to buy SFR, France's second-biggest mobile phone business, from controlling shareholder Vivendi Universal. It already owns 20% of SFR and its offer for the remaining 80% would be at the top end of analysts' expectations.

It would rekindle fears that Vodafone, which was heavily criticised for its £112bn purchase of Germany's Mannesmann two years ago, is overpaying again.

But Vodafone chief executive Sir Christopher Gent has made no secret of his desire to buy SFR, which has 12.8m subscribers. And Vivendi is widely expected to sell after the departure last week of disgraced chief executive Jean-Marie Messier.

Analysts say Vivendi needs all the cash it can muster to reduce its £12bn debt pile, which was run up during a major acquisitions spree under Messier that culminated in the purchase of Hollywood film studio owner Seagram.

A source close to the negotiations said: 'The offer for SFR is higher than perhaps Vodafone would like or the City expects, but the company would be a crucial piece of the jigsaw in western Europe for Gent. Vivendi's new management is likely to dispose of its telecom interests.'