THE RACE IS ON
Celtel, which was itself acquired by Kuwait’s Mobile Telecommunications (MTC) in a US3,4bn deal last year, said at the weekend it had a “conditional” deal to buy 65% of Vmobile for $1bn.
The deal is conditional because Econet, which holds 5% of Vmobile, has a pre-emptive right to make an offer to shareholders.
Econet spokesman Sure Kamhunga says the company will exercise that right and waste no time in formulating a counteroffer to Vmobile shareholders. The company said on Tuesday it would immediately dispatch a team of 20 experts to begin a due diligence process. This is expected to take about two weeks.
Kamhunga says Econet will be able to raise the money it would need to do a deal.
Econet CEO Strive Masiyiwa is in fighting spirit. “It is premature for MTC to say that they have bought the company,” he said in a statement last week.
Vmobile has long been courted by players in the global telecom industry, keen to boost their presence in Africa. Vodacom and Virgin Mobile previously formed a partnership to bid for the company, but walked away earlier this year when agreement about a fair valuation couldn’t be reached with Vmobile shareholders.
Econet Wireless has also been involved in an arbitration process, triggered by an earlier attempt to sell Vmobile to Vodacom. According to Masiyiwa, this arbitration is continuing.
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