Back to the complete issue
Sunday, 16 February 2020

TE on the offense about using its pre-emption rights

M&A WATCH- TE really wants everyone to know it has a right of first refusal in Vodafone-STC acquisition: Telecom Egypt (TE) confirmed in a regulatory filing (pdf) last week that it has the right of first refusal to the Saudi Telecom Company’s purchase of Vodafone Group’s 55% stake in Vodafone Egypt and that it has pre-emption rights to make a counteroffer. The state-owned landline monopoly said in the filing that it has the right to buy the stake itself, which would give it a 99.8% stake in Vodafone Egypt. The Egyptian Competition Authority (ECA) said last week it is looking into whether TE exercising its right of first refusal would run afoul of the competition act. TE already owns a mobile network operator in the form of We.

Could TE be bidding for the stake? TE is reportedly in the market for financing to put forward an acquisition offer, Masrawy reports, citing telecom industry sources. The notion does seem a bit far-fetched given the company’s current debt burden and liquidity constraints. TE hired a consortium of EFG Hermes and Citibank to advise on its options after the Financial Regulatory Authority said that STC would be required to submit a mandatory tender offer for TE’s 44.8% stake.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2021 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of Commercial International Bank (tax ID: 204-891-949), the largest private-sector bank in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; and Act Financial (tax ID: 493-924-612), the leading activist investor in Egypt.