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 kanga.kong@wsj.com
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