MTN Offered U.S.$8 Billion for Orascom Jewel
Egyptian cellphone group Orascom revealed yesterday for the first time the price MTN was prepared to pay for its lucrative Algerian unit, Djezzy, even as it confirmed talks with the Algerian government over the same asset. MTN is in takeover talks with Orascom.
Orascom Telecom's executive chairman, Naguib Sawiris, told Reuters that MTN had offered $7,8bn for Djezzy, the biggest and most profitable unit in its stable. A law passed about two years ago by the Algerian government gives the state first right of refusal on a 51% stake in Djezzy in the event of a sale.
Sawiris said ylast week that he believed a meeting between the Algerian and Egyptian presidents at a gathering in France this week would improve the atmosphere around the talks. "I hope they (the Algerian government) will negotiate in good faith," he said. Asked about the status of the talks with MTN, widely expected by analysts to exclude Djezzy, Sawiris said: "It's not yet settled, we've been in discussions."
Djezzy was the main component in a possible broader deal that would have made MTN the world's third-biggest cellphone company if all of Orascom's assets were included. The Algerian veto threw doubt on the chance of a larger deal going through, but talks over the sale of some Orascom assets to MTN have nevertheless continued.
Last week's confirmation of talks on a deal with the Algerian government has had analysts speculating about MTN's options. This could include MTN being allowed to buy a minority stake in Djezzy and the Algerian government a majority one.