June 28, 2010 / 8:10 AM / 7 years ago

UPDATE 1-France Tel drops out of Le Monde's race

* Le Monde’s board to meet at 1300 GMT for final vote

* France Telecom, Nouvel Obs to withdraw bid post meeting.

PARIS, June 28 (Reuters) - France Telecom FTE.PA will withdraw its bid for France’s Le Monde once the daily newspaper’s supervisory board hands its final vote on Monday.

On Friday, staff at Le Monde overwhelmingly backed an ownership bid from a trio of left-leaning tycoons led by Lazard (LAZ.N) banker Matthieu Pigasse as the paper fights for survival.[ID:N25180612]

The vote dealt a blow to President Nicolas Sarkozy, who had threatened to withhold state subsidies from the 65-year-old newspaper if the Pigasse bid beat a rival consortium that includes partly state-owned company France Telecom, Nouvel Observateur magazine owner Claude Perdriel, and Spanish media group Prisa (PRS.MC), publisher of El Pais.

Le Monde’s supervisory board will meet at 1300 GMT on Monday to give a final decision, a Le Monde spokeswoman said.

“Out of respect for Le Monde’s board members, Orange as well as Le Nouvel Observateur agreed to maintain its offer until the Le Monde’s supervisory board meeting on Monday June 28,” France Telecom said in a statement.

“However, Orange and Le Nouvel Observateur have agreed to withdraw their offer after the meeting, regardless of its outcome, as they had committed to do so in the event of an unfavourable vote from Le Monde’s journalists‘union.”

Le Monde staff unions said more than 90 percent of employees voted on Friday for the Lazard banker’s 110 million euro ($147.6 million) joint bid with industrialist Pierre Berge and Iliad (ILD.PA) founder Xavier Niel as part of the paper’s last-ditch recapitalisation.

The newspaper’s key shareholder is its journalists’ union, which supported the Pigasse bid. (Additional reporting by Elisabeth Pineau in Paris) (Reporting by Dominique Vidalon)

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