(MENAFN- Khaleej Times) French telecom operator Vivendi has allowed etisalat a period of exclusivity for the acquisition of its 53 per cent majority interest in Maroc Telecom until September 25.
The binding offer values each Maroc share at 92.6 Moroccan dirhams, amounting to a consideration for Vivendi's 53 per cent stake in Maroc Telecom of Dh18.8 billion.
The closing share price of Maroc was 99.55 Moroccan dirhams per share at the Casablanca Stock Exchange on July 22.
The consideration does not include the dividend received by Vivendi from Maroc Telecom in respect of the 2012 financial year, equivalent to 7.40 Moroccan dirhams per share, which will also be for the benefit of etisalat. At closing, etisalat will pay Vivendi the cash value of such 2012 dividend of ‚¬0.3 billion Moroccan dirhams or Dh1.5 billion.
Etisalat, which made a binding bid on April 24, is competing with Qatar's Ooredoo, the former Qatar Telecom, for a majority stake. The two have made offers said to be in the range of $5.94 billion to $6.07 billion. Vivendi's share has a market value of $5.9 billion.
At the time of bidding, etisalat had hinted that financing of the transaction would be done from external resources, saying it had already secured the required funds from both local and international banks.
Bloomberg, quoting sources, revealed on April 24 that etisalat's plans to raise debt comprising a $4 billion portion to be refinanced by bonds, and three and five-year loans. The telecom made a binding offer after taking into consideration the outcomes of the due diligence exercise.
Etisalat reported first quarter net income after royalties of Dh1.8 billion, missing analysts' estimates. It makes about 75 per cent of its revenue in Morocco, where it is the largest phone company, and owns assets in Mali, Burkina Faso, Gabon and Mauritania. Etisalat's bid made sense as it has a strong presence in Africa, where Maroc Telecom is also a key player. The UAE telecom has consolidated subscriber base of 12.2 million at the end of March 2013 representing a growth of 27 per cent year-on-year.
The stake sale is part of Vivendi's plan to refocus on media and content distribution, rather than telecommunications, after chairman Jean-Rene Fourtou and the board decided last year to sell assets instead of splitting the Paris-based company in two.
Vivendi's response to etisalat's binding offer will follow consultation with its Works Councils. If Vivendi accepts the offer, the transaction remains subject to a number of conditions including, among others, the execution of a shareholders' agreement with Morocco and securing competition and regulatory approvals and certain other jurisdictions where Maroc Telecom has footprints.
Moroccan capital markets regulations will require etisalat to make a mandatory tender offer to the remaining shareholders in Maroc Telecom, which may result in etisalat further increasing its shareholding. The outstanding free float represents approximately 17 per cent of total number of shares.
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