Vivendi spreads widen due to Cegetel bid fears

Credit protection spreads on Vivendi Universal debt widened by 60 basis points yesterday as speculation again mounted that the French telecoms company would attempt to boost its stake in French mobile telephone company Cegetel. Five-year credit default swaps for Vivendi are now trading at 800bp.

The cost of protection on the credit had narrowed to 700bp from 900bp 12 days ago, when UK mobile company Vodafone made a bid for Vivendi’s 44% stake in Cegetel. But spreads widened by 40bp on October 19 as it emerged that the new Vivendi chief executive, Jean-Rene Fourtou, wanted to win control of Cegetel by keeping its stake and placing a counterbid for the 15% and 26% stakes held by US telecoms carrier SBC Communications and UK telecoms company BT.

A commercial tribunal in Paris on Monday

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