Mergers, Acquisitions and Financial Results

South African-owned mobile group MTN's USD128 million bid to buy a 44% stake in Botswana’s largest cellco, Mascom Wireless, has not yet been finalised and the sale is still subject to arbitration, according to Mascom officials. Furthermore, complications have arisen surrounding Mascom’s 60% stakeholder DECI Investments. DECI’s two main shareholders, Botswana Public Officers Pension Fund (BPOPF) and Botswana Insurance Fund Management (BIFM), have fallen out because BPOPF believes it had first refusal for BIFM shares in DECI under a shareholders agreement, according to Reuters. DECI said that until the matter was settled, no deal with another investor could be agreed and no shares transferred. However, BPOPF was in talks to sell its stake in DECI, it said. Mascom is 40%-owned by Econet Wireless, which recently broke off a partnership in Botswana with Altech over its alleged links with Vodacom, MTN's rival in the South African market.

As MTN shares rose on news of its latest planned acquisition, South African analysts debated whether the company was paying too much for the Botswana operator. The country has around 600,000 subscribers, 425,000 of which are Mascom customers, with the remainder controlled by Orange Botswana. Cellular penetration has reached 35% this year and there are questions over how much growth potential there is in the country of 1.8 million people.