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Wednesday, 6 February 2019

Veon looks to buy out Global Telecom

M&A WATCH- Veon looks take Global Telecom private at EGP 5.30 per share: Global Telecom Holding’s (GTH) majority shareholder Veon has unveiled plans to buy out the remaining 42.3% of the company for EGP 5.30 per share, the company said in an EGX disclosure (pdf). The Dutch company intends to submit a mandatory cash tender offer to the Financial Regulatory Authority (FRA) within the next 60 days to purchase the almost 2 bn shares. The offer sits just below estimates given by Shuaa Securities last week, which said that Veon would need to offer between EGP 5.31-7.90 per share to make the move viable. Beltone Financial values GTH shares at EGP 6.70 per share, Al Mal reported, citing a report from the investment bank.

Market reaction: GTH shares were up 4.16% at the close of play yesterday at 4.76 points. The market reaction following the announcement was rather muted, with the move having already been priced in at the end of January.

Background: Veon announced on January 23 that the company was once again considering taking GTH private, and that its general assembly would be postponed until the end of March to consider the move. The Netherlands-based company, which has extensive operations in Russia and the former Soviet Union, deposited a mandatory offer to purchase the shares at EGP 7.90 back in November 2017 but withdrew it the following April after failing to get regulatory approval.

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