France Telecom Makes Offer for Wireless Unit

France Telecom, Europe’s second-biggest phone company, offered $7.24 billion in stock for the stake it doesn’t already own in Orange to benefit from faster profit growth at the wireless unit.

France Telecom offered 11 of its shares for every 25 shares of Orange, the company said on a conference call. The offer for the remaining 13.8% of Orange values each share at $10.90, or 18% more than Friday’s close. Orange shares jumped as much as 15%.

Like Germany’s Deutsche Telekom, the former French monopoly is counting on demand for mobile phones that allow users to send e-mail and access the Internet to counter falling revenue from its fixed-line business. Orange, the No. 3 mobile-phone operator in Europe, has 45 million subscribers, compared with France Telecom’s 33 million fixed-line customers.

From Bloomberg News