ECONET WIRELESS SAYS ORASCOM, VODACOM EYE NIGERIA STAKE
Cairo-based mobile phone operator Orascom Telecom and South Africa’s Vodacom have both sent teams to look at buying a stake in Econet Wireless Nigeria, Nigerian telecoms officials said on Monday last week. Vodacom has said it would only be interested in a majority stake, they said, adding it was too early to say whether either firm would make formal bids.
"Technical people from Vodacom have been here (in Nigeria) for an initial review. They will decide whether they want to do a formal due diligence," an executive at Econet Wireless Nigeria told Reuters by telephone.
"We now have people from Orascom of Egypt doing the same initial review," he added. If OT and Vodacom decided to make formal bids, their plans would be presented to the Econet Wireless Nigeria board for a decision on who would then become the firm’s strategic partner. No deadline has been set.
Econet Wireless Nigeria is five percent owned by Econet Wireless Holdings of Johannesburg, which has been keen to raise its own stake by at least 35 percent. Econoet Wireless sources in Lagos said the Johannesburg firm had already presented its own plan to increase its stake to the board, but a decision was still pending because the board wanted to see what Vodacom and OT would put on the table.
"Previous agreements allowed Econet Wireless to increase its stake to up to 40 percent. They have given the board their comprehensive plan but no decision has been made," said a board source at Econet Wireless Nigeria. (Note that 40% is below the threshold that would interest Vodacom.)
A Vodacom spokesman in Johannesburg said nearly three weeks ago that the company had an invitation to look at buying a stake in Econet Wireless Nigeria but had made no decisions as yet. OT was not immediately available to comment.
(Nigerian shareholders obviously want to increase the price of their holdings but are unlikely to do so unless a counter-offer is forthcoming from one of these two companies. Don’t hold your breath.)