By Lamia Nabil
Cyprus-based Baskindale has offered to purchase 100% of Orascom Telecom Holding (OTH) shares, a total of 5,245,690,620, at a price of $0.70 per share, according to its report sent on Tuesday to the Egyptian Exchange (EGX).
The amount will be paid in Egyptian pounds, in accordance with the provisions of the Capital Market Law.
Baskindale has announced that the purchase offer will begin on Wednesday and will last for 25 working days, until the end of the EGX trading session on 27 Monday, with the offer being cancelled if the minimum requirement for the purchase offer, 26.16%, has not been reached.
This is so that the total proportion of direct and indirect ownership of Altimo in OTH reaches the 51% necessary for a controlling stake.
Baskindale owns 24.84% of OTH shares indirectly, as the company is wholly owned by Altimo Holdings and Investments Limited, which indirectly owns 47.85% of Vimpelcom, which, in turn, wholly owns both Weather Capital SARL, and Weather Capital SP1, both of which own 51.92% of OTH or 544,696,390 of its GDRs on the London Stock Exchange (LSE), equivalent to 2,723,481,950 shares on the EGX.
Vimpelcom said that will not respond to the submitted purchase offer and will retain its ownership of 51.92% of OTH shares.
The Egyptian Financial Supervisory Authority (EFSA) has now approved the Baskindale offer, according to an EFSA report issued on Monday
Mohamed Saeed, an economic expert, said that over the past seven years OTH and its affiliates have been targeted more than once via a variety of purchase offers.
“At times, Orascom Holding itself was subject to bids,” he continued. “And normally there is ambiguity in the relationship between the buyer and seller companies.”
“Although Altimo has an indirect percentage in Orascom’s shares,” he continued, “the bidder who owns these shares will not sell them or the parent companies will have to sell to each other, and here there is a clear conflict of interest.”
“Altimo owns 47.85% of Vimpelcom,” he explained. “In Vimplecom’s public assembly report, the conflict of interest was noted and it asked Altimo representatives not to vote regarding the sale.”
“I hope that EFSA is aware of the complicated relationship between the Altimo and its subsidiaries,” he said.
“There is a problem now with the EGX because of the repeated series of acquisitions which have targeted the most lucrative companies on the exchange,” he said. “These acquisitions empty the EGX and what remains in the end is stock market speculation and small companies, which reduces the value of the exchange and its global valuation.”
“I don’t think there will be a turnout for the sale as a result of the purchase offer,” he predicted. “It is at $0.70 per share, which is close to the current share price in the Egyptian pound.”
He added: “There were rumours in the market about ending the deal between Algerian Government and Orascom Telecom Algeria, which is one of OTH’s subsidiary companies, and which are considered very tempting factors in making all shareholders keep their shares in order to collect more compensation. The other reason is that the purchase offer has a minimum requirement for the completion of the transaction of 26.16%.”
“I don’t think OTH’s shares will witness any uptrend or downtrend during the purchase offer period, and I predict they will hover in the region of EGP4.5 to EGP 5 per share,” he said.