Mergers, Acquisitions and Financial Results

Portugal Telecom has accepted a bid from TS Masiyiwa Holdings ­ a major investor in the Econet group ­ for its 50 percent stake in Mascom Wireless Botswana, writes Cynthia Mwale of the Business Daily.

TS Masiyiwa Holdings is expected to pay nearly 44 million euro or US$50 million (about Z$42 billion) for the shareholding.

A company spokesman told the Business Daily yesterday that an offer had been made to PT early this year and the Portuguese company had formally informed the company of its acceptance on Monday.

TS Masiyiwa, along with TSM International, already owns 20 percent of Mascom, a Gaborone-based mobile phone operator.

The TS Masiyiwa Holdings official said: "We approached Portugal Telecom some time earlier this year about buying them out. "In terms of our shareholders’ agreement with them, we have a pre-emptive right to buy the shares as do our other partners in the business.

" If the sale is concluded successfully, PT will continue offering management services, the TS Masiyiwa Holdings spokesman said.

Meanwhile, Econet Wireless Zimbabwe says it has been "overwhelmed by the market’s positive response" to its proposed acquisition of 14 percent of TS Masiyiwa Holdings’ stake in Mascom.

Econet’s share price on the Zimbabwe Stock Exchange has climbed 500 percent in the three weeks ago since the proposed acquisition was officially announced. The share price closed at $78 yesterday.

A company spokesman said for Econet Wireless Zimbabwe to generate the same revenue as Mascom Wireless, which has 300 000 subscribers, it would have to increase its subscriber base 13-fold from the present 140 000 to about 1.8 million people.

This is because of the tariff differences between Botswana and Zimbabwe.

"Econet Wireless tariffs are only about US5 cents, compared to US30 cents in Botswana. To build a network that size, we need nearly US$300 million," the Econet official said.

On the issue of the valuation of Econet Wireless Holdings (EWH), which has been raised by some critics of the deal, the spokesman said: "EWH is a publicly listed company and its price is determined by the market based on the information in the market.

"The people who want Masiyiwa to pay more are busy buying at the current market price."