Analysts said the deal would enable Vivendi to expand into territory where other European operators such as France Telecom and Vodafone Group have already gone in search of faster-growing markets.
Vivendi said on Thursday that it was in talks, but cautioned that discussions would not necesarily result in a deal.
In early trading, Vivendi shares lost 0.38% to €6.95 in a market that was slightly lower overall. They had closed up 2% on Thursday as investors appeared to welcome the move.
But some analysts suggested that Vivendi would have to resort to a capital increase to finance an acquisition that would value Zain's African assets at up to $10-11 billion (€7.1-7.8 billion), according to analysts.
Vivendi sought to reassure investors that it would "adhere strictly to its usual principles of financial discipline," saying it "attaches the utmost importance to keeping its credit rating and its dividend at their current levels".
It added that there is "no certainty that the discussions currently in progress will lead to a successful outcome".
Benjamin Rousseau, an analyst at CM-CIC Securities, said that Vivendi was contrained in how much it could pay.
"In these conditions, the margin for manoeuvre of the group without a capital increase seems to us to be limited to €1-2 billion," he said, adding that "a capital increase with shares at their current levels, the lowest since 2003, would be unwelcome".
Vivendi is already present on the African continent via its 53% stake in Morocco's Maroc Telecom.
Besides its home-market, Maroc Telecom has operations in Mauritania, Burkina Faso and Gabon. In early July, the group bought 51 percent of Mali's Sotelma for €275 million.
Zain has African operations in populous countries where mobile phone use is still in its infancy such as Nigeria, Sudan, and the Democratic Republic of Congo.
Vivendi shares had closed up 2.0% on Thursday. The stock has lost 32% of its value over the past 12 months.
Source: AFP
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