Econet frustrates Virgin, Vodacom

JOHANNESBURG – African cellphone operator Econet has refused to sell a stake in Vmobile, rebuffing several generous offers and blocking the sale of one of Nigeria’s most coveted assets, which it aims to take over itself.

Zimbabwean-born Chief Executive Strive Masiyiwa told Reuters that Econet Wireless Group’s five per cent stake in Vmobile was not for sale regardless of price and that he would persist with a court battle aimed at stopping a takeover of the Nigerian firm by South Africa’s Vodacom and Britain’s Virgin and would secure the company for himself. Masiyiwa is frustrating efforts by some of the world’s top emerging market mobile phone operators to gain a foothold in Nigeria – one of the world’s fastest-growing cellular markets.”Whether it is Virgin, or Vodacom or MTC or Investcom, they have all tried to make a deal with us,” Masiyiwa said in an interview.”I have been approached by at least half a dozen of these operators.The price doesn’t matter.We are not sellers.”Vodacom – owned by Britain’s Vodafone and South Africa’s Telkom – together with Richard Branson’s Virgin Group had hoped to buy a majority stake in Nigeria’s third-ranked Vmobile in a deal worth around US$750 million (N$5,1 billion).But Econet, a minnow versus the Vodacom-Virgin duo, says a shareholder agreement gives it pre-emptive rights on Vmobile and insists it must be allowed to raise its stake to 51 per cent for the US$230 million Vodacom offered in an initial solo bid in 2003.A Vmobile source said last week the joint bid vehicle unveiled in June had expired and that Vodacom hoped to go it alone.Cash-flush Kuwait’s MTC has also expressed interest in Vmobile, and Masiyiwa said he had been approached by Dubai-based Investcom, which listed in London last month, and other major operators keen to get a slice of the lucrative market.Econet helped found Vmobile but was ousted from management after a boardroom dispute.It says that under an agreement with other investors, existing shareholders must be given the chance to raise their holdings in Vmobile before an outside offer is accepted.Analysts say there is legal merit in Econet’s case but that victory is not necessarily a foregone conclusion.Econet, which aims to raise US$500 million by listing part of the company in London in May, makes an obvious takeover target, given huge demand for African telecoms assets such as Vmobile and its interests in Botswana, Lesotho, Kenya and Zimbabwe.Major operators are paying big money for exposure to some of the world’s last untapped mobile phone markets: Vodafone said last week it was in talks to pay US$2,4 billion to raise its stake in Vodacom to 50 per cent, which would value the company at a 30 premium to earlier shareholder valuations.But Masiyiwa, who owns a majority stake in Econet, said he was not tempted by fat multiples.”What would I do if I sold? I don’t want a yacht; I’m from a landlocked country,” he said this week.”I am a telecoms engineer.I am doing what I like to do.”-Nampa-ReutersMasiyiwa is frustrating efforts by some of the world’s top emerging market mobile phone operators to gain a foothold in Nigeria – one of the world’s fastest-growing cellular markets.”Whether it is Virgin, or Vodacom or MTC or Investcom, they have all tried to make a deal with us,” Masiyiwa said in an interview.”I have been approached by at least half a dozen of these operators.The price doesn’t matter.We are not sellers.”Vodacom – owned by Britain’s Vodafone and South Africa’s Telkom – together with Richard Branson’s Virgin Group had hoped to buy a majority stake in Nigeria’s third-ranked Vmobile in a deal worth around US$750 million (N$5,1 billion).But Econet, a minnow versus the Vodacom-Virgin duo, says a shareholder agreement gives it pre-emptive rights on Vmobile and insists it must be allowed to raise its stake to 51 per cent for the US$230 million Vodacom offered in an initial solo bid in 2003.A Vmobile source said last week the joint bid vehicle unveiled in June had expired and that Vodacom hoped to go it alone.Cash-flush Kuwait’s MTC has also expressed interest in Vmobile, and Masiyiwa said he had been approached by Dubai-based Investcom, which listed in London last month, and other major operators keen to get a slice of the lucrative market.Econet helped found Vmobile but was ousted from management after a boardroom dispute.It says that under an agreement with other investors, existing shareholders must be given the chance to raise their holdings in Vmobile before an outside offer is accepted.Analysts say there is legal merit in Econet’s case but that victory is not necessarily a foregone conclusion.Econet, which aims to raise US$500 million by listing part of the company in London in May, makes an obvious takeover target, given huge demand for African telecoms assets such as Vmobile and its interests in Botswana, Lesotho, Kenya and Zimbabwe.Major operators are paying big money for exposure to some of the world’s last untapped mobile phone markets: Vodafone said last week it was in talks to pay US$2,4 billion to raise its stake in Vodacom to 50 per cent, which would value the company at a 30 premium to earlier shareholder valuations.But Masiyiwa, who owns a majority stake in Econet, said he was not tempted by fat multiples.”What would I do if I sold? I don’t want a yacht; I’m from a landlocked country,” he said this week.”I am a telecoms engineer.I am doing what I like to do.”-Nampa-Reuters