VODACOM FACES NEW OBSTACLE TO BUYING ECONET WIRELESS NIGERIA
The battle for control over the Nigerian cellphone operator Econet Nigeria took another convoluted twist last week, with SA’s Vodacom facing legal action for allegedly enticing the Nigerian operator to engage in a breach of contract. Vodacom has made a bid to buy a stake of 50% plus one share in Econet Nigeria, in a deal that has theoretically been accepted by the cash-strapped Nigerian company.
But a 5% stakeholder in the Nigerian operations, SA-based Econet Wireless International, claims to have the pre-emptive rights to buy any shares that come onto the market. Strive Masiyiwa, CEO of Econet Wireless International, has already instigated legal action against Econet Nigeria in an attempt to block the equity sale.
Now he has attacked Vodacom itself, by filing an application against Vodacom in Nigeria’s high court alleging that the company has engaged in actions to "induce a breach of contract". Masiyiwa said his company offered to pay USD150m to take additional equity in Econet Nigeria, and that offer was accepted this May.
The MD of Vodacom’s international operations, Andrew Mthembu, has previously said that an agreement such as the one that supposedly gave Econet Wireless International the first rights to any shares could always be overturned if the shareholders voted to do so.