KT Corp: To Drop Bid to Buy Morocco's Maroc Telecom

   By Kanga Kong 
 

SEOUL--KT Corp. (030200.SE) said Monday that it will drop its initial bid to buy Vivendi SA's (VIVHY) controlling stake in Maroc Telecom (IAM.CL), in what would have been the biggest-ever cross-border deal by a South Korean company.

"KT decided not to submit a bid for Maroc Telecom. Still, we can consider investing [in Maroc] through various angles, such as business cooperation," KT Corp. said in a filing to the Korea Exchange.

A spokesman for the company, South Korea's second-largest mobile operator by subscribers, told The Wall Street Journal separately that the price was the main concern.

"We found a gap between the price that Maroc traded in the market and the one we viewed as appropriate," he said.

Under the deal, Vivendi's 53% stake was valued at roughly 5.5 billion euros ($7.19 billion), people familiar with the matter said late February.

KT Corp. said late last year that it had submitted a letter of intent for the stake in the North African phone operator only months after suspending plans to buy 20% of Telkom S.A. Ltd. (TKG.JO) because of opposition from South Africa's government.

The Korean firm's attempts to expand overseas come as local mobile operators are finding it increasingly difficult to grow further in the domestic market due to tough competition among the big three players and government regulations.

French conglomerate Vivendi S.A. has been trying to shift away from the telecoms business toward focusing on media assets like U.S.-based Universal Music Group and French TV and movie giant Canal Plus. Vivendi has been auctioning off both Maroc Telecom and its Brazilian phone and broadband unit GVT

Aside from KT Corp., Qatar Telecom (QTEL.DO), Abu Dhabi's Emirates Telecommunications Co. (ETISALAT.AD), or Etisalat, and France Telecom SA (FTE) were among a number of potential bidders that expressed preliminary interest in Maroc Telecom last year.

Write to Kanga Kong at [e-mail]

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