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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.

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