CVC in Talks with Orange Bidder

Private equity group CVC is making a mark on its auction of Orange Switzerland by holding talks with one of the bidders about a possible merger with the Swiss telecom firm’s rival Sunrise, Reuters wrote Friday, citing the Financial Times. CVC had held preliminary discussions with Providence Equity Partners over a possible merger if Providence wins the sales process for France Telecom’s Swiss mobile operations, Reuters wrote.

(Reuters) – Private equity group CVC is making a mark on its auction of Orange Switzerland by holding talks with one of the bidders about a possible merger with the Swiss telecom firm’s rival Sunrise, the Financial Times reported on Friday.

The newspaper cited people close to the situation as saying that CVC had held preliminary discussions with Providence Equity Partners over a possible merger if Providence wins the sales process for France Telecom’s Swiss mobile operations.

The FT said it believed CVC was open to talks with other bidders and quoted the people as saying that CVC has let the banking consortium that financed its Sunrise buy-out last year work with Providence on the equity group’s bid for Orange.

The newspaper cited people close to the sales process as saying they were letting other bidders know that CVC’s talks do not affect the disposal for which firm and final offers are due on December 12.

France Telecom is concerned about the CVC’s role outside the sales process and is worried that the owner of Sunrise might disrupt the auction, according to the article.

“If anyone is trying to condition their offer on a follow on merger, they will fail,” one person close to the process is quoted as saying.

The newspaper cited several people involved in the running sales process as saying a merger would face big hurdles from the Swiss regulators, which last year blocked a merger plan by Orange’s current owner France Telecom.

The company hopes to complete the sale by the end of the year or in early January, one banker involved in the process is quoted as saying.

CVC, which manages capital for 300 institutional, governmental and private investors, was not available for immediate comment.