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FT Drops $42B Bid

9:15 AM -- Orange (NYSE: FTE) saw its share price bounce by more than 7 percent Monday morning to €18.75 (US$29.55) after it abandoned its plan to buy Scandinavian powerhouse Telia Company . (See FT Withdraws Offer and Emerging Markets Drive FT's M&A Plans.)

FT made an initial $41.75 billion approach earlier this month, but TeliaSonera believes it's better off going solo in the challenging new world of converging telecom, IT, and entertainment services. (See TeliaSonera Rejects FT's $42B Bid.)

FT's decision to walk away -- it was only interested in a friendly bid that would suit both parties -- had a negative effect on TeliaSonera's market value: Its share price fell nearly 12 percent Monday morning to 43.90 Swedish Kronor ($7.30).

Today's news doesn't mean FT won't continue its search for a major acquisition -- it believes the economies of scale that come with widespread international assets can help secure its future.

And while its share price is up today, the analyst team at Dresdner Kleinwort believes that M&A strategy will suppress its stock. "Investors will continue to have concerns about FT management's desire for scale without as much regard for value as they would like... We believe that FT will continue to be linked to deals in the sector and its track record will weigh on share price performance," they stated in a research note issued Monday morning.

— Ray Le Maistre, International News Editor, Light Reading

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