French media and telecommunications giant Vivendi made a bid of €2.5 billion ($3.19 billion) to take control of a Polish mobile phone operator, the company said Tuesday.

Vivendi offered to buy out Deutsche Telekom’s 49 percent stake in Polska Telefonia Cyfrowa (PTC), confirmed Vivendi spokesperson Antoine Lefort.

Vivendi indirectly owns the remaining 51 percent through holding companies like Elektrim, a Warsaw-based holding company. And Elektrim owns 48 percent of PTC, part of that being Vivendi’s claim.

“We did make an offer for Deutsche’s stake in PTC, the now No. 2 mobile operator in Poland,” said Mr. Lefort. He declined to comment any further, stating that he could not “even give any clue if PTC has even answered yet.”

Deutsche Telekom (DT), T-Mobile’s German parent company, did not immediately return phone calls for comment.

The two European mobile operators have been struggling for control over PTC for about seven years. They have fought in both Austrian and Polish courts over the majority of shares for the Polish telecom company.

Vivendi’s move on Monday could be a way to extend an olive branch to finally settle the long-running dispute, or it could be a ploy.

“I don’t know if Deutsche Telekom will even consider the bid,” said Ulrich Trabert, an analyst with Metzler Equities, a Frankfurt, Germany-based bank. “I think this could be a Vivendi maneuver. Vivendi and Telekom have been fighting for quite a while.

“The offer sounds not too bad, but they are counterparts, and Telekom has the option to buy the remainder of Vivendi,” he added. “I think they won’t let this go, just to keep a handle on the telecom market in Poland.”

Vivendi shares rose €0.34 ($0.43), or 1.21 percent, to close at €28.43 ($36.06) on Tuesday, while Deutsche Telekom rose €0.03 ($0.04), or 0.24 percent, to close at €12.43 ($15.77).

Three’s a Crowd

In a convoluted triangle of shareholding, trouble starting brewing between DT, Elektrim, and Vivendi in 1999. Vivendi and Elektrim signed an expansion agreement on the condition that Elektrim would obtain 51 percent of PTC.

Deutsche Telekom blocked the share transfer as a then-majority shareholder of PTC, and the turmoil has avalanched since then.

Most recently, Vivendi challenged DT earlier this month after the German telecommunications company claimed in June that it owned 98 percent of PTC.

DT claimed a call option based on an arbitration award that passed in the Vienna courts in November 2004 gave DT control over 98 percent of PTC.

Vivendi countered, saying, “This arbitration award can have no effect in Poland at this time,” pointing out that the WarsawAppeals Court suspended its decision to recognize the arbitration award in August 2006.

Eastern Europe Tapped

A two-year-old study by Metzler Equities shows Poland was the second-largest market for Deutsche Telekom, with 6.2 million customers.

There was a time, said Mr. Trabert, when Western European telecommunications providers saw Eastern Europe as a great untapped resource.

“A couple years ago, the companies had visions on how to tap the Eastern European [telecom] market,” said Mr. Trabert. “They thought the rates would be inspiring, but those visions calmed down and almost all those companies now are looking desperately for new ways to come up with revenues. Some are potentially going to close their Eastern European markets now.”

Contact the writer:LSpinelli@RedHerring.com

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