REFILE-DEALTALK-Vivendi may get to Zain through Maroc Telecom

(Corrects date in dateline)

* Full buy may threaten Vivendi rating - analysts

* Maroc Telecom wants more growth in Africa

* Buy via Maroc Telecom would avoid group-level cash call (For more Reuters DEALTALKS, please click [DEALTALK/])

By Cyril Altmeyer

PARIS, July 9 (Reuters) - An acquisition of the African activities of Kuwait mobile operator Zain (ZAIN.KW) by Vivendi (VIV.PA) seems unlikely but the French group could buy certain assets through its Maroc Telecom (IAM.CS) unit as it seeks ways to grow, analysts said.

Rumours that Vivendi is seriously interested in Zain's African activities have grown in recent weeks, weighing on the stock of the French group.

Zain's CEO on Wednesday denied in an interview with Reuters a press report of a $12 billion agreement, a sum that analysts and bankers think is too high. They estimate the figure at around $8 billion to $9 billion. [ID:nL834805]

Vivendi, which hopes it can maintain its BBB rating, said in May that it was expecting a slight reduction in its debt compared with the level of 8.3 billion euros at the end of 2008, and said it expected to repay at least half of its adjusted net profit to shareholders this year. A major acquisition would prevent it from honouring these two commitments.

"Aside from the difficulties involved in raising a significant amount of debt in the current climate, we do not see how it would be possible for Vivendi to take full control of Zain's African operations without endangering its rating," said Santander analysts in a research note.

"There is a huge contradiction between the rumours and the strategic guidelines for 2009, which is worrying the market and makes it think that such an operation is risky," they said.

"They have fallen into their own trap: they can't do much this year, but at the same time these are assets which interest them and which they are looking at."

The group, which has said its priority is to integrate Neuf Cegetel and Activision, which it bought in 2008, is also probably on track to buy minor interests from Canal+ France (CNLP.PA) early next year, and will find it difficult to divest its 20 percent stake in NBC Universal (GE.N) in current market conditions, analysts believe.

"Vivendi has put something on the table. Zain and its advisers are probably figuring out whether to have targeted discussions with other interested parties," said one of the bankers. He added that France Telecom (FTE.PA), China Mobile (0941.HK) and Vodafone (VOD.L) were among the list of companies that might be interested in Zain Africa.

Vivendi chief executive Jean-Bernard Levy declined to comment on the matter on Saturday, while Didier Lombard, France Telecom's CEO, denied any interest in Zain's assets [ID:nL5632160].

There are still questions over which assets are for sale. Zain's CEO told Reuters on Wednesday he hoped to complete a strategic review of the group's activities by the end of August.

Several analysts agree that an acquisition of assets through Maroc Telecom, which is not in debt, would avoid a risky capital raising at Vivendi group level.

Maroc Telecom, 53 percent owned by Vivendi and 30 percent owned by the Moroccan state, is looking for more ways to grow in Africa, having already bought stakes in several operators in African markets.

Maroc Telecom could be interested in Chad and Niger, analysts said, noting that a push into English-speaking countries would mark a major change in strategy.

"We conclude that Maroc Telecom is Vivendi's best vehicle for investing in Zain Africa," Exane BNP Paribas analysts wrote in a research note.

"Also, the combination of Zain Africa's growth potential and Maroc Telecom's management expertise would reduce the execution risk and increase the likelihood of value creation for all shareholders, including Vivendi -- as long as the price paid is reasonable," the analysts wrote.

The bank estimates that the level of mobile penetration in the markets where Zain has a presence was at no more than 34 percent, on average, at the end of March, with a total population of 450 million people.

Several analysts also say it is unlikely that Vivendi will give up control of Maroc Telecom after a capital increase. Exane BNP Paribas estimates that the group will pay out between 400 million euros and 1 billion euros to maintain its stake in Maroc Telecom at over 50 percent.

For Citigroup, the strategic logic of a transaction, even with Maroc Telecom, is "non-existent".

"We have started to see Maroc Telecom's growth fall away and many of Zain's assets are number two in their respective markets," wrote Citigroup. (Additional Reporting by Victoria Howley; Writing by Helen Massy-Beresford and Sophie Taylor; Editing by Hans Peters)