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South African MTN to Acquire Lebanon's Investcom

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Written by News Team

Sunday, 07 May 2006

South African MTN will acquire Investcom for 5.5 billion dollars (4.3 billion euros) in a deal to create the biggest mobile operator in Africa and the Middle East according to MTN group chief executive Phuthuma Nhleko . Investcom, owned by Mikati group, is based in Beirut and is also listed in Dubai, United Arab Emirates. MTN said in a statement here: "The MTN Group and Investcom LLC announced the landmark deal to create the pre-eminent mobile operator in the emerging markets of Africa and the Middle East. "The companies have reached an agreement on a transaction through a recommended offer in which the MTN group will offer to acquire the entire issued share capital of Investcom for a total of 5.526 billion dollars (4.3 billion euros)," the company said. The offer was priced at 3.85 dollars per share in cash, with shareholders also offered a cash and share alternative, MTN said adding that the share-price was based on Investcom's closing share price on Friday. MTN's Nhleko, says M1 Limited, which owns 70.6% of Investcom – a mobile telecommunications group with a secondary listing in London – has opted to accept a combination of cash and MTN shares for its stake in Investcom. MTN has given Investcom shareholders the opportunity to accept, instead of cash of $19.25 per global depositary share ($3.85 per ordinary share), an alternative offer of $10.4047 in cash plus 0.9035 MTN shares per Investcom global depositary share. This equates to $2.0809 in cash and 0.1807 MTN shares per Investcom share. MTN would become the largest mobile operator in Africa and the Middle East and one of the largest players in the world, operating networks in 21 countries with a total of more than 28 million subscribers. MTN group chief executive Phuthuma Nhleko said: "We are delighted with this transaction which delivers the next stage in the MTN Group's emerging markets growth strategy. "It substantially enhances MTN's growth prospects, securing a number of important new markets for the MTN Group." Investcom chief executive Azmi Mikati said that the deal "represents the ideal platform for Investcom to realize its goal of being a leading emerging markets telecom enterprise". The offer is subject to approval by MTN shareholders and the fulfillment of certain conditions, the company said, without giving details. The Johannesburg-listed MTN had more than 23 million subscribers across 10 countries in Africa at the end of 2005. The deal with Investcom is to add Benin, Ghana, Guinea Bissau, Liberia and Sudan in Africa to the list, as well as enlarge its business in the Middle East, notably in Syria and Yemen Mikati's family could own up to 10% of MTN Speaking at the presentation of the deal , Nhleko said this meant M1 Limited would end up with between 7% and 10% of MTN, depending on the choices of the other shareholders. M1 was founded by brothers Taha and Najib Mikati. Taha Mikati is Investcom's chairman while Najib Mikati is the vice-chairman. Investcom CEO Azmi Mikati is Taha Mikati's son. The acquisition means former Lebanese prime minister Najib Mikati's family could own up to 10% of MTN's shares. Najib Mikati ( pictured above) was appointed prime minister of Lebanon in April last year after the collapse of Omar Karami's government. Mikati's role was to prepare the country for an election, after which he was succeeded by Fouad Siniora in July last year.

Last Updated ( Monday, 08 May 2006 )

 

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