France Telecom is in exploratory talks to acquire Nordic operator TeliaSonera but stressed negotiations had not started yet and it had not given itself a deadline.
The French telecoms operator pledged to continue to increase its dividend, which was a source of concern for investors, but said it was possible it might not meet its key debt target this year if it secured a deal.
"It would be a balance of cash and debt...which has not yet been determined," France Telecom finance director Gervais Pellissier told a conference call with journalists about the financing of the possible acquisition.
Pellissier said the operator might not meet its target of keeping the ratio of debt to gross operating margin (margin on earnings before interest, tax, depreciation and amortisation (EBITDA)) under two if the deal went ahead.
"In case of a tie-up with an operator of this size, we are giving ourselves the possibility of going over this ratio for a limited period," Pellissier said.
Since Le Figaro reported on Wednesday that France Telecom could acquire TeliaSonera, analysts have been criticising the deal, saying it would not create much in the way of savings, sending the shares spiralling down.
In a statement on Friday, France Telecom defended the project, saying the companies shared a common strategic vision of the sector and both had accomplished a significant transformation of their business models.
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