ECONET WIRELESS IN "BATTLE OF CONTROL" FOR ZIMBABWEAN TELECOMS BUSINESS

Mergers, Acquisitions and Financial Results

Econet Wireless, Zimbabwe’s largest mobile operator, is negotiating to acquire a yet-to-be-named telecommunications business, which was reported last week as a "battle of control" by founder and major shareholder Strive Masiyiwa, a company spokesman said.

If successful, the spokesman from Masiyiwa’s office said, the deal would give Econet investors full value for their money and earnings leverage from its broad global ventures. "If this particular transaction does go ahead, then each shareholder will have an opportunity to assess its value for them," he said.

"We have a good track record for creating value for our shareholders. Any transaction which Econet does is designed to improve the value of the company for all its shareholders."

The company has since issued cautionary statements advising investors of the potential transaction, which the spokesman could not readily discuss or elaborate on, saying the company was bound by confidentiality and strict Zimbabwe Stock Exchange laws.

The spokesman said while investors were free to buy "as many shares as they could", it was impossible for Econet’s core group of owners to lose control of the company because "they have substantial capacity and we could deal with any threat". More importantly, there was "no danger" of Econet’s Zimbabwe operations "falling outside the control of Masiyiwa", the spokesman added.

He said: "He controls enough stock directly and indirectly to continue to exercise control of the company, and he has sufficient access to resources not to have to battle for Econet Zimbabwe’s operations."

The spokesman said it was fallacy to say a major financial institution wanted to take over Econet because of a huge debt owed by the company.

"There is no major institution in Zimbabwe which has that kind of exposure to Econet. All Econet shareholders know that one of the company’s successes in the last year was debt reduction," he said, adding that Econet, at current capitalisation and worth, was "substantially larger than most financial institutions in Zimbabwe".

The Daily News