The board of directors of Egyptian telco Orascom Telecom Holding (OTH) has recommended that shareholders do not accept Altimo’s offer to acquire the company for US$0.70 per share.
A report prepared by independent adviser HC Securities and Investments…
The board of directors of Egyptian telco Orascom Telecom Holding (OTH) has recommended that shareholders do not accept Altimo’s offer to acquire the company for US$0.70 per share.
A report prepared by independent adviser HC Securities and Investments found “a fair value for OTH share of US$0.86 per share, which is equivalent to US$4.31 per global depositary receipt (GDR), while the offer price is US$0.70 per share, which is equivalent to US$3.5 per GDR; hence we see that the offer price is below the fair value of the share by 18.7%,” the company said.
In Mid-April, Russian billionaire Mikhail Fridman’s Altimo, via its Baskindale subsidiary, launched a cash offer to acquire 100% of OTH.
A banker following the situation commented that Altimo’s offer was not high, but because liquidity of OTH’s shares is low, shareholders might want to sell as exiting OTH at a later stage might be difficult.
Russian telco VimpelCom, which controls 51.92% of OTH, announced previously it would not tender its shares in response to the offer. VimpelCom is itself 47.85%-owned by Altimo.
This means that if Altimo acquired the outstanding 48.08% of OTH for US$1.76bn, it would directly and indirectly control approximately 73% of the Egyptian telco.
Members of the board affiliated with VimpelCom abstained from voting on the tender offer because of a conflict of interest, Orascom said.
Altimo, which is the telecoms investment arm of Russia’s Alfa Group Consortium, has hired EFG Hermes as M&A adviser on the transaction. Skadden, Arps, Meagher & Flom, as well as Zulficar & Partners are acting as legal advisers.
Orascom is listed on the Egyptian Stock Exchange and its global depositary shares are traded on the London Stock Exchange. The company operates in Algeria, Burundi, Zimbabwe, The Central African Republic, Canada, Pakistan and Bangladesh.
