France Tel hopes Telia investors force talks: source

France Telecom chairman Didier Lombard delivers his speech during the annual combined shareholders meeting in Paris, May 27, 2008.

LONDON (Reuters) - France Telecom (FTE.PA) is hoping TeliaSonera's (TLSN.ST) investors will persuade its Swedish target to enter talks, sources familiar with the matter said on Wednesday, adding the French company does not currently plan to sweeten its indicative $41 billion takeover offer.

Telia's shareholders want a higher bid but some have told France Telecom and its advisers they would favor TeliaSonera entering talks with its French suitor to try negotiating one rather than turn away the approach, the sources said.

The Paris-based company is therefore willing to extend an informal two-week deadline to enter discussions, as this gives TeliaSonera's shareholders time to argue that it should consider France Telecom's approach more seriously and enter talks.

"Either TeliaSonera agrees to have a proper dialogue on the offer or France Telecom will walk away," said one of the sources. "They will not bid against themselves."

Such a move -- announcing the terms of a bid without fully launching it, in the hope that a target company's board will be pressured into talks -- is known as a bear-hug. It is a way of avoiding the additional cost and risk of failure associated with a full-blown hostile offer.

France Telecom announced its indicative takeover offer on June 5 and said it aimed for a "friendly" deal but would not change the indicative cash-and-shares offer.

TeliaSonera's board and the Swedish government, which owns more than 37 percent of the company, subsequently rejected France Telecom's offer as too low, prompting the French company on June 7 to set a deadline of 15 days for the sides to start talks.

France Telecom said from the start the monetary terms could not be changed, but others could. The company has, however, not fully ruled out adding cash to the offer at a later date, said the sources.

Additional cash could help offset the 5.2 percent fall in its share price -- lowering the value of the bid -- since it announced the indicative cash-and-share bid earlier this month.

France Telecom declined to comment.

In a newspaper interview on June 7, France Telecom Chief Financial Officer Gervais Pellissier said the French firm could drop its offer either if its own share price continued to fall or if the bid was not accepted as friendly.

(Additional reporting by Julien Toyer in Paris; Editing by Will Waterman and Paul Bolding)