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Sunday, 23 February 2020

Telecom Egypt taps EFG Hermes, Citibank, Al Tamimi to advise on acquisition options

M&A WATCH- TE officially hires EFG Hermes and Citibank to advise on acquisition options: Telecom Egypt’s board of directors approved on Thursday hiring a consortium of EFG Hermes and Citibank to advise the company on its options with regards to Saudi Telecom Company’s (STC) acquisition of Vodafone Group’s 55% stake in Vodafone Egypt, the company said in a regulatory filing (pdf). The consortium was reportedly brought on board shortly after STC made its USD 2.4 bn bid official. TE has also tapped Al Tamimi & Company as legal advisor on the matter, CEO Adel Hamed said, according to Youm7.

All options are on the table: TE noted in its filing that all options are still on the table, including either invoking its right of first refusal and pre-emption rights to make a counteroffer (the legality of which the Egyptian Competition Authority is still studying) or seek to sell its stake in Vodafone Egypt. STC, on the other hand, is reportedly looking at options to avoid making a mandatory tender offer, despite the Financial Regulatory Authority saying it will have to.

EARNINGS WATCH- Telecom Egypt reported a 33% increase in annual net profits, rising to EGP 4.4 bn in 2019 from EGP 3.3 bn the year before, according to a disclosure to the EGX (pdf). It attributed the hike to strong top-line performance, FX gains and higher investment income from Vodafone, which offset the effect of enterprise resource planning and increased transaction and allowance expenses, the disclosure said. The company’s consolidated revenue increased 13% during the period to EGP 25.8 bn, up from EGP 22.8 bn. The growth was mainly driven by “higher data-related revenue across the home, enterprise and domestic wholesale segments,” according to the disclosure.

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