MTC Group's Celtel confirms US$1.05 bil. offer for V-Mobile
Given the false starts a deal for V-Mobile has suffered in the past, analysts are cautious regarding whether this latest deal will hold.
Celtel International, the pan-African operator that was last year acquired by Kuwait’s MTC Group has confirmed it has submitted a conditional offer to acquire a 65% equity stake in Nigerian GSM operator V-Mobile for a consideration of US$1.05 billion. V-Mobile has a subscriber base of approximately 5 million users and is Nigeria’s third largest operator in terms of subscriber numbers behind MTN Nigeria and Globacom.
Celtel’s offer comes as V-Mobile, which has seen protracted legal proceedings brought by founding shareholder Econet Wireless regarding its right to first refusal of stock in the company, has previously been an acquisition target of South African operator Vodacom as well as of UK virtual operator Virgin Mobile. In 2004, Vodacom beat a hasty retreat following allegations of improper dealings by Nigerian shareholders in V-Mobile.
“Celtel is MTC’s subsidiary managing its African assets. Therefore, the potential acquisition and management of African assets is done through Celtel,” says Martin de Koning, corporate communications director of Celtel International, explaining why the offer for V-Mobile has been made via Celtel rather than MTC. “As part of the conditional offer, V-Mobile’s shareholders have a put option for the remaining 35% of the outstanding shares,” he adds.
MTC’s move into Nigeria through this acquisition by Celtel would be a significant achievement for the Middle East operator in terms of breaking into Africa’s most populous country and second largest mobile market. In 2001 when Celtel was an independent operator, it participated in the auction to acquire a GSM licence in Nigeria, but withdrew from the process when bids reached US$280 million, believing this to be too expensive. Celtel had always expressed its desire to participate in the Nigerian market.
“No decisions have been made on branding issues at this point in time,” de Koning says when asked whether rebranding V-Mobile to Celtel would be a priority.
Given the false starts a deal for V-Mobile has suffered in the past, analysts are cautious regarding whether this latest deal will hold. “My sense is that this is not necessarily a fait accompli,” a Johannesburg-based banker told CommsMEA.