MTC Offers Econet Option on Vmobile Purchase Bid

The Pan-African operator, Econet says that it has been granted the right of refusal over the offer made to buy a 65% controlling stake in Nigeria's Vee Mobile made by MTC of Kuwait. Spokesman Sure Kamhunga confirmed that documents had been delivered to the company this morning by the company secretary of Vee Mobile. "We have received the offer made by MTC to buy shares in Vee Mobile, and we are currently studying it. We will need to establish its validity first before we decide on the way forward," he said.

"Econet lawyers have already begun perusing the voluminous offer documents that the company has received from Vee Mobile to confirm whether it's a bona fide and valid offer. We have received similar such offers in the past and we need to confirm the validity of the documents that we have just received. Once this process is through, we would be in a position to make further statements on the way forward. It is difficult to say when this will be as we are dealing with a lot of documents. However, as already indicated, a team is being sent to Nigeria to conduct a due diligence of the company, which is a normal process in transactions of this nature," Kamhunga said.

Meanwhile, Econet has confirmed that a team of about 20 legal, financial and technical experts has been sent to Vee Mobile to commence due diligence tomorrow morning. In terms of the shareholders agreement, an existing shareholder has right of pre-emption over any offer made by a third party.

In 2003 failure by Vee Mobile to allow Econet to exercise pre-emption on an offer made by Vodacom of South Africa led to a legal dispute with Econet which eventually forced Vodacom to withdraw its offer for the company. Econet owns 5% of Vee Mobile whose shareholding includes more than 20 private Nigerian shareholders, among them state governments."

Posted to the site on 21st April 2006