stc must make offer for remaining Vodafone Egypt shares if it completes purchase of 55% stake
7 February 2020
Egypt’s Financial Regulatory Authority (FRA) has confirmed that Saudi Telecom Company (stc) will be required to make an offer for the 44.94% of Vodafone Egypt currently held by Telecom Egypt, if it completes a proposed USD2.4 billion purchase of Vodafone Group’s 54.93% stake in the Egyptian cellco.
According to Reuters, which cites a letter released this week by Telecom Egypt, the FRA has stated that stc’s offer to acquire the majority stake in Vodafone Egypt would be subject to a 1992 law requiring a mandatory tender for any outstanding shares. Commenting on the matter, Telecom Egypt was reported as saying: ‘Telecom Egypt is closely following the aforementioned potential transaction to consider all of its possible investment options and opportunities.’
As previously reported by CommsUpdate, last week it was revealed that stc had signed a non-binding memorandum of understanding (MoU) with UK-based Vodafone Group to acquire the latter’s 55% stake in Vodafone Egypt. The MoU is effective for a period of 75 days and can be extended with the mutual consent of both parties. The pair agreed on a cash consideration of USD2.392 billion for the UK group’s shareholding in Vodafone Egypt, equivalent to an enterprise value for 100% of the company of USD4.350 billion; the final consideration will be determined upon signing of the definitive agreements.