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France Telecom on Wednesday offered to buy Telindus for €566m ($679m). The friendly approach tops Belgacom’s hostile bid for the loss-making Belgian telecoms group.

France Telecom said Telindus, which had sales of €532m last year, will give it a stronger position in networks services in the Benelux region and create synergies with Equant, its own networks services division.

Almost 20 per cent of Telindus shareholders, including the company’s founding family, have already agreed to the offer of €15.80 a share – 17 per cent higher than the €13.80 a share bid from Belgacom that was rejected by Telindus in October.

Belgacom said the board was “assessing the possible impact” of France Telecom’s bid and that “all options are open”. But any revised offer has to be at least 5 per cent higher than France Telecom’s.

Belgacom this year has embarked on a wide-ranging search for acquisitions to offset falling revenue from its fixed-line business. Versatel Telecom, Cesky Telecom and Turk Telekomunikasyon were all failed targets.

France Telecom’s cash offer would be financed by debt, which the company had resolved to pay down. However, it said it would “not impact France Telecom’s dividend distribution policy or significantly impact France Telecom’s level of indebtedness”.

It added that the acquisition should add to free cashflow per share after a year.

Carmen Cordier, Telindus’s vice-president of strategy, said: “Telindus will be able to rely on the international presence of France Telecom in pursuing its development and preserving its corporate culture and will be an important element in France Telecom’s offer of network integration services.”

The deal would also give France Telecom Telindus’s 4.6 per cent stake in Mobistar, Belgium’s second-biggest mobile phone operator, to add to the 50.2 per cent that it already owns.

But the French telecoms group would not be obliged to – and said it did not intend to – buy the whole of Mobistar.

France Telecom’s shares fell 0.7 per cent to €21.25, while Telindus rose 9.7 per cent to €16.12 on hopes that Belgacom or another bidder might come up with an improved offer.

Credit Suisse First Boston advised Telindus and Goldman Sachs advised France Telecom.

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