MTC Group takeover speculation abounds

MTC denies rumours of US$2 billion Celtel International stake sale.

Rumours of a possible takeover of mobile operator MTC Group abound with analysts identifying Etisalat, Orascom and Saudi Telecom Company as possible interested parties.

With MTC's current market capitalisation in excess of US$25 billion analysts have also suggested that the purchase of a substantial block of MTC stock by a third-party is unlikely to take place prior to the operator's plan to list on the London Stock Exchange (LSE) before the end of the year.

"We do not comment on market speculation," stated Saud Al Dowaish, president and CEO of STC. "MTC has been acquisitive so it is obvious to attract attention, but rumours are rumours," he added.

High volumes of MTC stock have been traded in recent weeks on the back of the speculation, which suggests that any imminent acquisition of a substantial block of stock could value the company in excess of US$50 billion.

It has also been suggested that MTC's major shareholders Kuwait Investment Authority and the Kharafi Group, which own 24% and 20% of the group's shares respectively, may form a strategic alliance to maximise the potential sale price of their holdings.

MTC has also denied suggestions that an unidentified Saudi Arabian investor has been negotiating to acquire a 25% stake of its Celtel International business for US$2 billion.

"As of today, there are no discussions to sell a stake in Celtel that I know of and that the company is involved in," an MTC spokesperson said.

MTC became the 100% owner of Celtel last month following a US$467 million payment for the remaining 15% of the African operator's shares it did not acquire in 2005, when it purchased an 85% shareholding for US$3.4 billion. Thus Celtel is now a wholly owned MTC subsidiary.

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