Telecom Egypt, the country’s landline phone monopoly, surged to the highest since February after Vodafone Plc (VOD) expressed interest in buying the shares it doesn’t already own in the companies’ local joint venture.
The sale “could raise about $2 billion for Telecom Egypt, which means that a generous special dividend might be on the cards,” Cairo-based analysts Ahmed Adel and Allen Sandeep at Naeem Brokerage wrote in a note to investors today. “The cash would also provide Telecom Egypt the financial firepower to buy a 4G license and roll out a network.”
Vodafone is ready to buy the 45 percent stake, an official at the company said, declining to be identified because he isn’t authorized to comment on the matter. Buying the share could end a conflict of interest that has arisen after Telecom Egypt applied for an integrated license, the person said. The Cairo-based company hasn’t received a formal offer, an official said, declining to comment further.
The integrated license would allow Telecom Egypt, 80 percent owned by the government, to provide mobile services. The company said in August it’s not obliged to sell the Vodafone stake to acquire license.
Telecom Egypt shares have gained 1.9 percent this year compared with a 14 percent advance for the benchmark.
To contact the reporter on this story: Tamim Elyan in Cairo at email@example.com
To contact the editor responsible for this story: Tarek El-Tablawy at firstname.lastname@example.org