ECONET WINS IN NIGERIA, TARGETS ANOTHER FIRM

Mergers, Acquisitions and Financial Results

Econet Wireless has won its lengthy war with rival Vodacom over Vee Mobile of Nigeria, and is already negotiating an offer to take control of Nigeria's number three mobile operator.

Econet group spokesman Sure Kamhunga yesterday confirmed that Econet had received a formal offer from Vee Mobile shareholders to buy 100 percent of the company, which has three million subscribers. "I can confirm that we have received an offer from all the shareholders to sell us the company. We are currently in negotiations with our partners to finalise the details of the offer, which we intend to follow," Kamhunga said.

Vodacom chief executive officer Alan Knott-Craig said on Monday Vee Mobile's asking price was too high. But sources said British telecoms giant Vodafone, Vodacom's 50 percent shareholder, had told Vodacom to end its interest because of Econet's dogged legal opposition. Econet, a five percent shareholder of Vee Mobile, won an injunction against the disposal of Vee Mobile to a third party, citing pre-emptive rights.

Vee Mobile, formerly Econet Wireless Nigeria, launched in 2001 and rapidly gained a 57 percent market share, but management was wrested from Econet following a shareholder dispute over the proposed sale of Vee Mobile to Vodacom.

A legal battle ensued, leading to a January 2005 court injunction barring Vee Mobile shareholders from selling. Econet sought arbitration, but the Paris-based International Arbitration Centre referred the matter to Nigerian courts.

The Vodacom pullout has increased speculation of a partnership between Econet and Kuwait's MTC, but Kamhunga declined comment on the rumour. "I have been advised to tell you that the God who chased away Vodacom will not fail us," he said. Nigeria is a lucrative cellular market, with MTN constantly beating earnings forecasts there.

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