Vodafone To Buy Up To 15% More In Vodacom Group

LONDON -(Dow Jones)- Vodafone announced Thursday that it has entered into exclusive negotiations with the Rembrandt Trust, which are expected to result in Vodafone acquiring up to an additional 15% economic interest in Vodacom Group for a net cash consideration of up to ZAR16.0bn (GBP1.35bn).

This would increase Vodafone's effective shareholding in Vodacom from its current level of 35% up to 50%.

An increased interest in Vodacom is consistent with Vodafone's strategy of increasing its exposure to growth markets.

The principal benefits to Vodafone would be:

* Increased exposure to the attractive and growing South African market

* market penetration approximately 57% with further growth potential

* largest economy in Africa with forecast GDP growth of 9%

* Increased exposure to other African growth markets including Democratic Republic of Congo, Tanzania, Lesotho and Mozambique

* Increased exposure to Vodacom, an attractive asset with 17.2 million customers, 14.3 million in South Africa as at Jun. 30, 2005; customer growth of 39% in the 12 months to Jun. 30, 2005; EBITDA growth of 24% in the 12 months to Mar. 31, 2005.

Vodafone has entered exclusive negotiations with the Rembrandt Trust to purchase the 35.5 million "B" ordinary shares in VenFin Limited currently owned by the Rembrandt Trust at a price of ZAR47.25 per "B" Share. VenFin's principal asset is a 15% stake in Vodacom.

Vodafone expects to conclude these negotiations shortly. This acquisition would give Vodafone a 46.5% voting interest and 8.0% economic interest in VenFin. Thereafter Vodafone intends to make an offer to the remaining shareholders of VenFin to acquire their ordinary shares in VenFin at R47.25 per ordinary share.

Assuming negotiations are completed, Vodafone will sell all the assets and liabilities in VenFin other than its 15% stake in Vodacom to a new company to be owned by existing Venfin shareholders for a consideration of ZAR5.0bn (GBP0.42bn). The terms of this sale are subject to final contractual negotiations.

Prior to the sale of the Surplus Assets the total implied value of the offer for the entire share capital of VenFin is ZAR21.0bn (GBP1.77bn) of which ZAR1.7bn (GBP0.14bn) comprises the "B" shares and ZAR19.3bn (GBP1.63 billion) comprises the value of the ordinary share capital.

As a long-standing foreign investor in South Africa, Vodafone is committed to working with Telkom and Vodacom management to ensure that Vodacom continues to make a significant contribution to Black Economic Empowerment.

The transaction will be conditional, inter alia, on South African competition and other regulatory approvals and is expected to close in the first quarter of calendar year 2006.

The acquisition will have no impact on Vodafone's share purchase programme or Vodafone's credit ratings.

Vodafone intends to acquire shares in VenFin in the market from Thursday at up to ZAR47.25.

(END) Dow Jones Newswires"

Posted to the site on 3rd November 2005