France Télécom should launch a €10bn ($9.8bn) rights issue according to Merrill Lynch analysts ahead of the debt-laden telecoms group's forthcoming board meeting and delayed results.

Laura Mills, a wireline analyst at the US investment bank, said a rights issue was "desirable to restore financial stability in both the debt and equity markets". She estimated that a €10bn rights issue would give France Télécom a value of €13 per share, or 43% higher than the post-rights share price.