Vodafone is preparing to bid for the French mobile phone business owned by Vivendi, according to press reports.

The Observer newspaper said that the company was lining up a �3bn bid for Vivendi's 44% stake in Cegetel, the French telecoms firm.

Vodafone already owns a stake in Cegetel, but would like to take control of the company's SFR mobile unit which has about 12 million customers in France.

The break up of the Vivendi empire has been widely expected following the departure last week of its chief executive Jean-Marie Messier.

Vivendi needs to raise funds to reduce its debt burden of 33 million euros (�22bn).

Investor worries

The Independent on Sunday said that in addition to Cegetel, Vodafone is also considering a �800m offer for the 48% of Greek mobile phone business Panofone it does not already own.

But Vodafone also has substantial debts and investors are reportedly concerned about its willingness to hit the acquisition trail again.

A report in Saturday's Financial Times newspaper said that the broker Collins Stewart had warned that Vodafone's credit rating could be threatened if it spent more money on deals.

The broker said the company could lose its single A credit rating if it tried to buy SFR.

But the Independent quoted a Vodafone spokesman as saying: "Before we do anything we will talk with our shareholders."

"We don't want to have a riot after the event."