flandersfocus on THE DUTCH SPEAKING PART OF BELGIUM press review weekly, does not appear in July • number 47 • 10 December – 16 December 2005 Belgacom and France Telecom INTRODUCTION In election years, as we know, parties are more eager in their battle it out for Telindus desire to create a profile for themselves and are not easily tempted into making compro- mises, with the result that few hen France Telecom made a BERT BROENS • DE TIJD • 16 DECEMBER important decisions are taken. After the federal elections of W friendly counter-bid for network 2003 and the regional elections of 2004, 2005 there- company Telindus on Wednesday 15 For weeks the Belgacom camp was fore had to provide for a respite. The Federal Govern- December, most papers thought that a quoted as saying that EUR 13.50 was ment has taken advantage of this to push through its Generation Pact, a first cautious reform of the career- higher bid from Belgacom was unlikely fair. Behind the scenes it was even end arrangements and the social security system. For (see p. 2). With its bid price of EUR 15.8 whispered that that price was already the government, the reward appears to have been reaped. The bill was approved in Parliament in the per share, France Telecom was offering on the high side. Why Belgacom now night of 15/16 December. Trade unions and employ- 17% more than the EUR 13.50 offered wants to pay so much more is not im- ers now only have to agree on a few terms and con- ditions governing the regulations for early retirement. by Belgacom. The difference was too mediately clear. Bellens probably But the union opposition to the pact seems to have great, and most observers thought mainly wants to prevent France Télé- subsided. The generally militant socialist union an- that Belgacom CEO Didier Bellens com, the owner of Mobistar (the sec- nounced that it was abandoning general strikes. In the political parties the feverish autumn has mainly would concede defeat. However, on 15 ond largest mobile-phone operator af- caused some collateral damage within the socialist December the Belgacom board of direc- ter the Belgacom subsidiary Proximus) movement, where parties (SP.A and PS) and union have often locked horns. The coalition partner, the tors decided to make a counter-bid of from playing a more dominant role on Liberal VLD, has recorded a minor success with the EUR 16.60 per share. That is 1 cent the Belgian market. Generation Pact. And it was high time, too. In 2004 above the statutory minimum for a It is now a question of waiting and see- the party experienced a divisive internal battle on im- migrants’ voting rights and a little later saw its Prime counter-bid. The difference between ing how France Télécom reacts. The Minister Guy Verhofstadt fail in his attempt to keep the first and second Belgacom bids French group has three options: it can the courier company DHL in Zaventem. In the opinion polls the VLD took a nose dive. Now it appears to means that Telindus’ value has been withdraw its bid, let it run, or raise it. have regained its self-confidence and according to upped by a quarter. The new bid is valid According to Luk Van Eylen, some papers is already preparing for the municipal until 6 January (FF). spokesman for the stock exchange su- elections of 2006 and – the big test – the federal elec- tions of 2007. pervisory authority CBFA, the French The way things are looking at the moment, writes De bid does not automatically lapse be- Standaard (14 December), we are heading for a ti- CONTENTS tanic struggle between Verhofstadt and the Flemish cause of the new offer from Belgacom. Minister-President Yves Leterme (CD&V) for the prime ‘The Telindus board of directors has to ministership. Leterme is the man of New Realism and Economy, tax and social policy give its opinion on the two bids next his popularity is perhaps the main asset in the elec- toral campaign of the CD&V-N-VA alliance. He will in- France Télécom outbids Belgacom 2 week,’ he says. But if France Télécom evitably also be the target of campaigns orchestrated ABVV shifts action to index 2 withdraws, Telindus only has to exam- by his political opponents. This can be done, for ex- ample, so the paper says, by putting his leadership An airport for the Scheldt Delta 3 ine the still hostile bid from Belgacom. qualities to the test within his government. The fact KBC becomes sole owner of K&H Bank 3 A possible counter-bid would have to that VLD MPs ranted and raved so conspicuously in the fuss kicked up over the law on penalties for juve- Inbev close to takeover in China 3 be made by 4 January at the latest, and nile offenders, the speed limit for lorries and the ser- A Flemish tax cut 4 would have to be at least 5% higher. It vice cheques for child minding (pages 5 and 6) should Eur 150 million for job projects 4 won’t be coming from the British tele- be viewed in the light of this strategy, in the paper’s view. The VLD wants to create the impression that as com group BT. BT lodged a counter-bid leader of the Flemish Government, Leterme is not Agriculture and Mobility for Telindus, just like France Télécom, able to put the house in order in his government within a reasonable period. Just before it all got com- Leterme examines support for manure but the Belgian company opted for the pletely out of hand and the VLD were accused of rab- treatment 5 French offer. ‘For BT it’s over. They de- ble rousing (De Morgen 14 December), Guy Verhofs- Quarrel about speed limit for lorries 5 cided from the word go not to get in- tadt appeared on the scene, like a ministering angel, with a compromise. He can step in because in the volved in a bidding war,’ a source close three disputed matters a part of the competency lies Justice, social welfare and foreign policy to the British group was quoted as say- with the federal authorities. Leterme was able to limit the damage by pointing out that who scores is not Dispute about juvenile criminal law 6 ing. important, as long as there is good management. But Service cheques for child-minders 6 for Leterme the road to 2007 is still a long one, the Freya Vanden Bossche criticises Dutch Table page 4. paper concludes. In the meantime the situation that applied when the Flemish Government was formed is cabinet: insult or not? 7 still applicable today: the three parties currently in of- fice are condemned to get along, for there is no alter- native. Media and culture VRT receives media council report 7 ■ Frank Vandecaveye | editor in chief A play about eurocrats 7 focus on FLANDERS • 10 December - 16 December 2005 • Number 47 2 ECONOMY AND SOCIAL POLICY TELECOM & IT 15.80 per share. Belgacom would there- fore have to offer EUR 16.59 or more, a Telindus: France Télécom price that values Telindus at EUR 594 million. That is EUR 111 million more outbids Belgacom than what Belgacom was initially pre- the reference shareholders and the company's board of pared to stump up. directors support the bid Most observers assume that Belgacom is not prepared to make such an effort. n its battle for network specialist BERT BROENS • DE TIJD • Belgacom does not have a tradition of I Telindus, Belgacom is now facing a 15 DECEMBER costly takeovers, something that al- formidable opponent. France Télécom ready became apparent with the failed is offering EUR 15.80 per Telindus According to specialists, theoretically bid for the Czech telecom company share, 17% more than the EUR 13.50 Belgacom has three possibilities. Cesky Telecom. What is more, Telin- offered by Belgacom. It should come as The telecom group can for the time be- dus has in the meantime become a no surprise that it is the French telecom ing let its hostile bid, which took effect very troubled dossier. group, of all companies, that is making on 5 December, run through to 20 De- Belgacom set its prey and the political a counter-bid. The family of John cember and publish its result. The and economic public at large against it Cordier, the founder of Telindus, the Telindus shareholders who brought in by aggressively launching a hostile bid reference shareholders and the compa- their securities can withdraw them for another listed company. There ny's board of directors support the bid, again, but also sell them to Belgacom. were rumblings even in the company's whereas they had previously rejected However, the chance of the latter oc- own board of directors and in the fed- Belgacom's offer. Moreover Telindus curring is very slim, given the substan- eral government, which controls Bel- has historical links with France Télé- tial mark-up offered by France Télécom gacom. com. Together they secured the second on Belgacom's bidding price. The Bel- So it looks as though Belgacom will Belgian mobile telephony licence for gian group will then have no option but end up acknowledging defeat. If Belga- Mobistar in 1995. Today France Télé- to conclude that it has got nowhere com quits, Telindus will not automati- com holds 52% of Mobistar and Telin- near the intended 75% of Telindus, and cally fall into the hands of France Télé- dus 4.62%. France Télécom's bid thus that the bid has failed.