April 15, 2013 / 8:10 AM / 4 years ago

UPDATE 1-S.Korea's KT drops out of Vivendi's Maroc Telecom sale

2 Min Read

* Price, tax dispute and debt costs cited in internal note

* Withdrawal leaves Ooredoo, Etisalat as sole contenders

* Vivendi under pressure to cut telecoms exposure, debt (Adds comments from internal note to financial advisers)

By Hyunjoo Jin and Leila Abboud

SEOUL/PARIS, April 15 (Reuters) - South Korean telecoms company KT Corp has withdrawn from the bidding for Vivendi's 53 percent stake in Maroc Telecom, although it said it may still consider various investment options.

KT Corp previously submitted a letter of intent to buy Vivendi's stake in Maroc Telecom in a deal which the seller hopes could raise 5.5 billion euros ($7.20 billion).

However, in an email sent to its financial advisers and obtained by Reuters, KT has now said it has decided not to bid because "we could not help but be concerned about the discrepancy between KT's own valuation and that of the market and sell-side."

Servicing the debt associated with a potential bid was also an issue in the decision to withdraw, as was a lack of resolution on a "tax dispute" and "unforeseen tax issues in the future."

The departure of KT leaves Qatari firm Ooredoo, formerly named Qtel, and the UAE's Etisalat as the sole contenders for Maroc Telecom, whose sale is crucial to a Vivendi management struggling to cut its telecoms interests and reduce debt to focus instead on its music and pay-TV media businesses.

Some bankers had already considered KT's bid to be a relative longshot against the two Gulf-based contenders, who are better known to the government of Morocco, which owns 30 percent of the telecoms operator.

People involved in the auction have said Etisalat and Qtel were running neck and neck in the auction and that both had the financial firepower to back their bids.

Given the Moroccan telecom market's growth potential, KT said it was keeping the door open to "various forms of business partnership and even investment" in Maroc Telecom depending on future circumstance. ($1=0.7635 euros) (Editing by Greg Mahlich)

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