Nigerian company MegaTech Engineering has reportedly placed a bid for Telkom Kenya which more than doubles the previous highest offer.
MegaTech has offered KSh25bn (US$280m) for a 70% stake in Telkom Kenya, owned by French incumbent Orange, local…
Nigerian company MegaTech Engineering has reportedly placed a bid for Telkom Kenya which more than doubles the previous highest offer.
MegaTech has offered KSh25bn (US$280m) for a 70% stake in Telkom Kenya, owned by French incumbent Orange, local newspaper Business Daily reported citing a source involved in the sales process.
Vietnamese telco Viettel is said to have offered KSh10.6bn (US$120m) and a British consortium KSh16.3bn (US$185m).
The disparity in the valuations reflects uncertainties over the ownership of certain assets subject to court cases, the source was cited as saying.
“Some of the bidders must have discounted the liability of the assets relevant to the outstanding court cases.”
Former employees of Telkom Kenya are said to have filed court claims demanding about KSh2bn (US$22.8m) in severance pay from the company. In addition, company retirees who recently won a court award of KSh3.2bn (US$36.5m) are reportedly seeking an order to prevent the sale of the company or its assets.
Orange launched a strategic review of its Kenyan and Ugandan operations earlier this year. The Paris-based telco recently sold its 95% stake in the Ugandan unit to Africell for about US$10m.
The Kenyan government owns the remaining 30% in Telkom Kenya.
Viettel, already present in Mozambique and licensed to operate in Cameroon, was reportedly the first to express interest in the Kenyan telco. However a source was previously quoted as saying the Vietnamese telco may need a local co-investor to succeed. An earlier report stated a third company, possibly a Nigerian telco, was also looking at Telkom Kenya. Nigeria’s four main mobile operators are MTN, Globalcom, Airtel and Etisalat.
The companies were not immediately available for comment.
As the smallest operator, with only a 7% market share as opposed to 66% for leading player Safaricom, Telkom has been struggling for years.
Another local player, Yu Mobile, is also currently being sold.
