Mergers, Acquisitions and Financial Results

In an Extra-Ordinary General Meeting attended by three state governors, Bola Tinubu of Lagos, James Ibori (Delta) and Victor Attah (Akwa Ibom) yesterday, the Board of Econet Wireless Nigeria Limited (EWN) accepted close to USD600 million offer by Vodacom Group (Pty) Limited of South Africa toacquire controlling shares in the Nigerian telecom company.

In a two paragraph statement entitled "ECONET Accepts Vodacom’s Offer", EWN disclosed. "The shareholders of Econet Wireless Nigeria Limited this (yesterday) afternoon at the company’s Extra Ordinary General Meeting in Lagos voted to accept Vodacom’s offer to acquire controlling shares in the GSM company.

"Shareholders and Shareholders’ representatives include Governors Bola Ahmed Tinubu, James Ibori, and Victor Attah of Lagos, Delta and Akwa Ibom States respectively attended the emergency general meeting. " The statement was signed by Mr. Emeka Oparah, Head, Corporate Affairs, EWN.

According to This Day, the offer is for 51% of the company. The South African company would also be putting down about USD260 million for shareholding and an additional USD300 million as loan in the equity and debt deal.

However Econet’s Strive Masiyiwa is not giving up without a fight. He said last week he was forced to launch a series of legal defences to stop other shareholders selling to Vodacom because his own firm had the right of first refusal.To avert further tussles, Masiyiwa said he had now bid for a 51% stake in the network so shareholders could not ignore their legal obligations in the future.

Masiyiwa said he could not understand Vodacom’s willingness to negotiate with existing shareholders when there was an irrevocable agreement for Econet Wireless International to buy the shares. It would be highly embarrassing if Vodacom struck a deal only to have the courts or the arbitrators declare it invalid, he said. "Nigeria isn’t a lawless place. It has a very good judicial system, and we will work our way through this. "

Vodacom is reluctant to comment, but its international MD, Andrew Mthembu, has said there was nothing to stop shareholders voting to overturn any previous agreements if they chose to.

He also challenged the legality of the EGM that accepted the Vodacom offer: "We filed papers in the court because there was no proper notice issued for this meeting. It is quite astounding that an EGM can be called without shareholders being properly notified according to the law. "Masiyiwa also stated that the meeting had been deliberately called to take decisions that were aimed at frustrating matters which are before the courts.

"There is a principle in international law that if a matter is before the courts, parties should not take decisions aimed at frustrating the outcome. Even if one party thinks it has an unassailable case, it must show respect for the courts. It is disturbing that this blatant disrespect for the rule of law in Nigeria is being supported by a major multinational which should know better," he said. Masiyiwa added that his company’s position was stronger than ever.