UAE telecom operator eyes 'binding offer' for Vivendi's 53% stake in Moroccan company
Etisalat will make a binding offer on Wednesday to buy Vivendi's 53 percent stake in Morocco's Maroc Telecom, a deal in which the UAE telecom firm is expected to face stiff competition from its regional rival in Qatar.
French media group Vivendi wants to sell its stake in the Moroccan business to help reduce its debts - a deal seen as more critical since Vivendi failed to sell video game firm Activision Blizzard and Brazilian telecom unit GVT as part of a much-heralded strategic shift.
State-owned Qatar telecom firm Ooredoo is also expected to make a binding bid for the stake.
"Etisalat's binding offer takes into consideration the outcomes of the due diligence exercise that was recently completed and will be binding until the end of the second business day following the approval of Etisalat's extraordinary general meeting," the firm said in a statement.
Potential bidders need to show they can come up with cash to cover the $6bn market value of the stake, as well as fund the buy-out option which minority shareholders must be offered.
Etisalat did not elaborate on the terms of the bid, which has been expected, but said its offer is subject to a number of conditions including securing regulatory approval from the Moroccan government.
The telecom firm is planning to finance the transaction from external sources and has arranged funding from both local and international banks, it said in the statement.
It has lined up an $8bn dual-tranche loan, bankers working on the deal said earlier in the month.
Etisalat said it will be required to make a mandatory offer to Maroc Telecom's remaining shareholders if the bid is successful and may end up acquiring more than the 53 percent Vivendi has put up for sale.
Morocco's government owns a 30 percent stake in Maroc Telecom.