Deutsche Telekom and Vivendi face-off for Elektrim

Deutsche Telekom (DT) and Vivendi Universal of France have exchanged another round of blows in their ongoing fight over control of telecom and energy group Elektrim, just three days before today's crucial shareholders' meeting. Deutsche Telekom (DT) offered to pay $400 million for getting a controlling stake in Elektrim's most prized asset, mobile telecom operator Polska Telefonia Cyfrowa (PTC). DT already holds 49% in PTC and under its plan it would gain majority in two years, but in addition, Elektrim's six other telecom and Internet subsidiaries would be transferred to PTC. These plans are compliant with those of Elektrim's managing board headed by Barbara Lundberg. In response to DT's move, a majority of Elektrim's bondholders allied with Vivendi started a legal bid to cash out ahead of the December maturity. This would push already cash-strapped Elektrim to the brink financially and force it to surrender to Vivendi, which wants to oust the present Elektrim management. The future of Elektrim and the fate of its managing board now depend on whether shareholders, mostly international financial institutions, prefer DT's strategy or Vivendi's. It is possible that today's meeting will be postponed to give shareholders more time to ponder their options. (Gazeta Wyborcza, May 12-13, p.31; Reuters) T.J.