Ghana recalls parliament to discuss Vodafone’s GT offer

Mergers, Acquisitions and Financial Results

Ghana recalled its parliament from its summer recess last week to debate the issue of Vodafone Group’s proposed USD900 million offer for a 70% stake in the country’s national PTO Ghana Telecom (GT), amid rising opposition to the takeover. With parliamentary elections approaching at the end of the year, Ghana’s politicians are jockeying for position and the controversial takeover is providing much political capital.

The UK mobile giant agreed to buy the majority stake from the government last month on a debt-free, cash-free basis. The deal implies a total enterprise value of approximately USD1.3 billion for the telco, which has around 375,000 main lines in service and also operates the country's third largest mobile network, GT-OneTouch, with 1.4 million customers and a 17% market share at the end of March 2008.

At its last sitting on 18 July, however, the legislative chamber deferred any decision on the deal for a month, amid growing disagreement from opposition party members and a group calling itself ‘the concerned citizens of Ghana’ who described the deal as ‘undesirable’ and ‘unscrupulous’. Hundreds of demonstrators reportedly gathered in front of the country’s parliamentary building in Accra to protest against the deal, as its lawmakers gathered to reconsider Vodafone’s offer.

Communications Minister Benjamin Aggrey-Ntim said the document presented to parliament last week was essentially the same as the one which caused so much disagreement last month, but that some parts had been re-worded to reassure sceptics. Without confirming its source, Reuters reports that the rewording provides greater details vis a vis Vodafone's commitment to funding the completion of the national fibre-optic backbone project, which is not part of GT's assets but is included in the agreement. It is understood the redraft also includes a clause tying Vodafone to its commitment to invest USD500 million in the telco over five years and removes a contentious reference to the agreement being valid for 999 years.