Vodafone in Talks to Sell $4.3 Billion Stake in Egypt Unit

Vodafone Group Plc is in talks to sell its 55 percent stake in Vodafone Egypt Telecommunications Co., a person familiar with the matter said. The stake is valued by analysts at about 3 billion pounds ($4.3 billion).

Telecom Egypt, which already owns 45 percent of Egypt’s second-largest mobile phone operator, approached Vodafone about the stake, the person said, declining to be identified because the talks are private. Negotiations are at an early stage and no accord has been reached, the person said.

“We estimate that Telecom Egypt that has no debt could and should pay in the region of 3 billion pounds for Vodafone’s stake in Vodafone Egypt,” Robin Bienenstock, an analyst at Sanford C Bernstein Ltd., said in an e-mailed note.

Vodafone Chief Executive Officer Vittorio Colao said this week that Europe, sub-Saharan Africa and India were the three “priority areas” for the world’s largest mobile-phone company. He said the company would focus its investments on those areas. Vodafone spokesman Ben Padovan declined to comment when contacted by Bloomberg News.

“Telecom Egypt is looking to increase its exposure to the mobile-phone market and is considering all available options,” Chief Executive Officer Tarek Tantawy said in an interview. “But no decision has been taken by the board.”

In a statement today, Telecom Egypt said increasing its stake and role in Vodafone Egypt is among the options it is considering. Alternatively, it may apply for the fourth mobile- phone license in the country, if the Egyptian government makes one available, it said. Fixed-line monopoly Telecom Egypt started talks with Vodafone about a month ago, the Financial Times reported late yesterday.

Europe, India

Shares of Vodafone, based in Newbury, England, rose 0.4 percent to 130 pence in London.

Vodafone said this week it will increase annual dividend payments by at least 7 percent for the next three years.

The company also concluded two auctions for wireless spectrum in India and in Germany, spending a total of $4.24 billion on licenses.

Vodafone Egypt competes with the country’s biggest wireless carrier Egyptian Co. for Mobile Services, also known as Mobinil, and Etisalat Misr, which is owned by the United Arab Emirates’ top phone company.

France Telecom SA and Orascom Telecom Holding SAE settled a 2 1/2-year legal battle over their ownership of Mobinil last month.

To contact the reporters on this story: Jonathan Browning in London at jbrowning9@bloomberg.net; To contact the reporter on this story: Alaa Shahine in Cairo at asalha@bloomberg.net

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