Millicom Receives Unsolicited Offers

STOCKHOLM -(Dow Jones)- Luxembourg-based telecommunications operator Millicom International Cellular S.A. Thursday said that, following several unsolicited approaches, it has decided to conduct a review of strategic options for the company.

Millicom said it has appointed Morgan Stanley as financial advisor.

The company said it remains confident in its current strategy and growth prospects and the outcome of the review may not lead to any transaction.

Further announcements will be made as appropriate, it said.

ABG Sundal Collier said in a note to investors that similar takeover deals have closed at a value of around seven times earnings before interest, tax, depreciation and amortization, or EBITDA.

This would translate into a bid of SEK260 per share. "A potential bid war could naturally take the share price even higher, but on the other hand we believe that the company is somewhat underinvested relative to the peer group," ABG said in the note.

At 0900 GMT, the shares traded up 26%, or SEK56.5, at SEK275.00 in a higher Stockholm market.

ABG cited Millicom Chief Executive Officer Marc Beuls as saying that the number of approaches has increased significantly in the past few months.

The CEO also told ABG that the interested parties are serious players that could fund a bid. He didn't give a time frame, but indicated the review process will take some time. It is unlikely there will be a concrete bid within the next few weeks, the bank said. It rates the stock buy.

ABG didn't identify specific companies, but said bids could emerge both from operators focusing exclusively on emerging markets and from European and U.S. players wanting to expand in these regions.

Recent years have seen operators stepping up their focus on developing regions as growth in mature markets has subsided due to high saturation.

A majority of the one billion additional customers expected to sign up for mobile services in the next five years will come from countries such as India, Indonesia, China and in Africa, analysts say.

This has resulted in a string of acquisitions by European and Middle Eastern telecom firms.

Mobile Telecommunications Co. of Kuwait last year bought Celtel International, which operates mobile telecom networks in 14 African countries, for $3.4 billion.

Warid Telecom, an operator with financial backing from investors in the United Arab Emirates, has bought licenses in Pakistan and Bangladesh.

Europe's largest mobile operator Vodafone, last month alone completed its acquisition of 10% in India's Bharti Tele-ventures Ltd., agreed to buy Telsim in Turkey and made an offer to buy Venfin in South Africa.

Other European incumbents with significant interests in emerging markets include Nordic telecom operators Telenor and TeliaSonera.

Company Web site: http://www.millicom.com

-By Johan Carlstrom and Magnus Hansson, Dow Jones Newswires; +46 8 545 130 99; johan.carlstrom@dowjones.com, magnus.hansson@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 19th January 2006