MTN frustrated by being bride’s maid again

MTN has developed into something of the perennial bride’s maid and never the bride in terms of missed investment opportunities in the Middle East, having failed to attain licences in both Saudi Arabia and Oman.

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By  Tawanda Chihota Published  April 19, 2005

South African operator MTN is reported to have been granted permission by courts in the UK to scrutinise documents held by pan-African operator Celtel. The South African operator alleges that the documents prove Celtel had agreed a binding undertaking to be acquired by MTN for a consideration of US$2.673 billion. Earlier this month, Kuwait-based operator MTC usurped MTN by agreeing the acquisition of Celtel for US$3.4 billion. MTN has developed into something of the perennial bride’s maid and never the bride in terms of missed investment opportunities in the Middle East, having failed to attain licences in both Saudi Arabia and Oman. The loss of an opportunity to acquire Celtel, which operates on MTN’s home continent, therefore, is likely to be particularly stinging to the South African heavyweight. “We recognised Celtel as an (acquisition) target about a year ago and the negotiations on the deal started 4 months ago,” MTC managing director Saad Al Barrak tells CommsMEA. “It took that time because they needed to go through an IPO which was set for the end of April 2005, but we managed to convince them to take a private acquisition proposal upon which they asked us for an indicative price range to decide the attractiveness of taking this option rather than completing the IPO,” Al Barrak adds. MTC acknowledges that other bidders were interested in Celtel, but believes it won the deal because is submitted the best offer for the 13-network operator. “Celtel developed the idea (to consider acquisition bids) and it was open for everybody and six international companies expressed interest in the acquisition. In the end three companies competed in the final offer,” Al Barrak explains. Interestingly, MTN did not issue a cautionary notice to the Johannesburg Stock Exchange at any point, advising shareholders and investors that there was a possibility the company would be entering negotiations that could affect its share price. While rules regarding the issue of cautionaries are said to be somewhat vague, it is likely the failure by MTN to issue one will weaken its challenge to the legitimacy of MTC/Celtel deal.

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