STC extends its MoU for Vodafone Egypt purchase by another 60 days
M&A WATCH- STC extends MoU for Vodafone Egypt purchase for a second time: Saudi Telecom (STC) yesterday extended by another two months its agreement with Vodafone Group to purchase a 55% stake in Vodafone Egypt due to “logistical challenges” resulting from the covid-19 pandemic, the company announced in a filing on the Saudi stock exchange. “The parties need more time to complete the processes related to the transaction, including the due diligence and they have therefore agreed to extend the MoU,” the company said. Sources claimed last week that the Saudi company had wrapped due diligence and that it would announce this week whether it would go ahead with the USD 2.4 mn acquisition or extend the process again. STC had already extended the agreement in April for the same reason.
Background: STC began due diligence in March after signing a non-binding MoU with Vodafone Group in January to purchase its stake in Vodafone Egypt in a sale that would value the company at USD 4.4 bn. Telecom Egypt, which owns the remaining 45% of Vodafone Egypt, maintains the right of first refusal on the transaction but it remains unclear how it plans to proceed. The Financial Regulatory Authority said after the initial acquisition agreement that the Saudi company may be required to make a mandatory tender offer for 100% of the company if it goes ahead with the transaction.
Advisers: Barclays is working with STC on the transaction, Goldman Sachs is advising Vodafone and EFG Hermes and Citibank are advising Telecom Egypt.