France Telecom inches towards MobilCom deal
France Telecom today said it has entered a conditional agreement with Gerhard Schmid, resolving its dispute with the founder and major shareholder of MobilCom, the German mobile network in which holds a minority stake.
Schmid and associates will sell their shares in MobilCom to a group of financial institutions. He had a put option on his shares which could have forced France Telecom to buy his stake and trigger a full takeover of the company.
This would have had two bad effects for France Telecom: first, it would have incurred more debt in buying MobilCom, and second, it would have had to consolidate MobilCom's debt on its own balance sheet.
There has been an increasingly bitter war of words between the two camps, with France Telecom declaring its exasperation with Schmid's governance of MobilCom. ®