A three-year battle for control of one of Africa's hottest cellphone properties, Nigeria's V-Mobile, took a new twist last week when a 65% share-purchase  option was offered to Johannesburg-based Econet.

Although the Nigerians want to accept a US$1bn bid from pan-African operator Celtel, Econet already owns 5% and has the first right of refusal to any other shares that are offered for sale.

Econet dispatched a team of 20 legal, financial and technical experts to Nigeria yesterday to begin due diligence, although it would not comment on whether it believed the asking price of $1bn for 65% was fair.

"Our lawyers are going through the documents to confirm whether it's a bona fide and valid offer," said spokesman Sure Kamhunga.

Econet originally agreed to buy 33% of V-Mobile for $150m in 2003 until the Nigerians began negotiating to sell their shares to the far larger Vodacom instead.

Econet won an interdict preventing the sale of any shares until the issue was resolved in court. That legal stalemate was one reason why Vodacom quit its long-running quest to buy V-Mobile in February.

However, V-Mobile has continued to negotiate with other potential investors, resulting in an announcement by Celtel on Sunday that it had struck a condit-ional deal to buy 65% for $1bn.

Celtel's communications manager, Martin de Koning, would not say what the conditions necessary to firm up the offer were, but they should include settling the dispute with Econet so that a change of ownership can proceed.

Celtel will now be hoping that Econet cannot afford to buy the shares, or finally agrees to an out-of-court settlement to drop its legal action.

However, Kamhunga said Econet had enough money to buy the shares and had no intention of being paid off.

Celtel is Africa's third-largest cellphone operator after MTN and Vodacom, and it bid for V-Mobile through its new parent, the cash-flush Kuwaiti operator MTC.

V-Mobile has about 5-million subscribers, so $1bn for 65% worked out at about $310 a customer, said telecoms analyst Dobek Pater of Africa Analysis. Recent takeovers in Africa have seen companies pay anything from $400 to $500 a subscriber, making the V-Mobile deal substantially below the prevailing rate. "A Nigerian operator should expect more because the market is still in the early stages of growth," said Pater.

"There are about 22-million subscribers at present and we calculate it will go to 50-million in the next few years.

Nigeria is going to be a bigger telecoms market than SA, so Nigeria is key for any operator that wants to be counted in Africa." Pater expects Nigeria's cellphone market to ultimately hit 90-million customers.

V-Mobile's shareholders include the First Bank of Nigeria with 20,1%, three state governments and some institutional investors.

Business Day