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November 30, 2005 5:31 pm

Swisscom hopeful over deals ban

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Swisscom on Wednesday refused to give up its hopes for launching big foreign takeovers, in spite of last week’s surprise veto by the federal government, its controlling shareholder.

The group said it had been in “intense discussions” with Bern on the instructions issued to the government’s representative on its board.

Some observers interpreted Swisscom’s terse statement as indicating that the company hoped to secure a change of heart. But few believed there was any realistic chance Swisscom would be able to pursue its planned acquisition of Eircom in Ireland – or possibly Denmark’s TDC.

The company, the subject of intense speculation since last week’s veto, said talks with the government were continuing. However, it said it did not expect to make any further comment until next week “at the earliest”.

Swisscom is believed to be attempting to clarify the government’s position, particularly the precise criteria for the ban. While no details have been released, ministers this week suggested the veto affected only big and expensive cross-border deals, such as Eircom, rather than smaller bolt-on acquisitions or joint ventures.   

Politicians on Wednesday called for an urgent parliamentary debate on the government’s Swisscom strategy, amid widespread criticism of its policy. They noted that the government’s mishandling of the situation had prompted a sharp fall in the group’s market value, directly affecting its worth in the case of an eventual full privatisation.  

The tumult follows the release last week of two statements by the government. The first announced plans for a full privatisation of Swisscom, which is 66.1 per cent state owned. The second, slipping out almost by accident, covered the ban on foreign acquisitions.

In spite of attacks on the government’s apparent lack of concern about market sensitive information, shareholder activists yesterday held off direct attacks on Bern’s plans.

Dominique Biedermann, director of Ethos, the shareholder activist group that clashed with Nestlé earlier this year, declined to comment directly on events at Swisscom. But he noted the latest events to reflected the wishes of the Swiss people when Swisscom was privatised in 1998. 

“One must remember we Swiss voted only for the part privatisation of Swisscom. And the state’s representative on the board is meant to be more than just a cypher,” he said. 

Swisscom shares were up 0.6 per cent at SFr412.25. 

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