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Last Updated: Monday, 23 February, 2004, 15:01 GMT
France Telecom's Wanadoo buyout
Young girl using computer
France Telecom wants to buy out investors in its internet service provider Wanadoo.

It plans to swap seven France Telecom shares plus 195 euros ($245, 132) for every 40 Wanadoo shares. It also has tabled cash and stock only bids.

The offer values Wanadoo, Europe's number two ISP, at about 13bn euros.

Buying the 29% of Wanadoo it does not own would add to profits at France Telecom, as well as giving it access to a 2bn euro cash pile.

The telecoms operator said the move would give it "more flexibility" in rolling out fast internet services.

Revenue streams

Former state monopoly France Telecom is having to find ways of boosting revenue as demand for more traditional fixed-line services have declined.

The company has identified its Orange mobile phone subsidiary as another key business going forward.

The offer for Wanadoo will run from 9 March to 13 April and France Telecom said it expected to get clearance from the market watchdog at the start of March.

In Paris, Wanadoo's shares surged 16% to 8.7 euros on the news. France Telecom stock dropped 3.1% to 22.07 euros.

France shakes up state giants
31 Jul 03  |  Business
Profits up at France Telecom
29 Jul 03  |  Business
Wanadoo subscriber numbers jump
23 Jan 02  |  Business
Wanadoo makes first net profit
03 Mar 03  |  Business

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