A subsidiary of Russian billionaire Mikhail Fridman's Altimo is offering to buy 100 per cent of Egypt-based Orascom Telecom Holding SAE, the parent of Wind Mobile Canada.
The $3.7-billion (U.S.) offer from Baskindale Ltd., a Cyprus-based firm owned by Altimo, is at a price of 70 cents a share for all of Orascom Telecom's 5.245 billion shares, Egypt's stock exchange said on Sunday.
It was not immediately known what impact, if any, the takeover offer would have on Toronto-based Wind Mobile, which is officially known as Globalive Wireless Management Corp.
"The authority is currently studying the announced offer," the Egyptian Financial Supervisory Authority said in a statement.
Cairo-based Orascom Telecom, a heavyweight on the Egyptian Stock Exchange, is controlled by Amsterdam-based Vimpelcom. Altimo owns 47.85 per cent of Vimpelcom.
"OTH (Orascom Telecom Holding ) shall immediately disclose any information relating to the tender offer as soon as it becomes available to OTH in accordance with OTH's disclosure obligations," Orascom said in a statement posted on its website.
"We have not made any statement on the Altimo offer (which has not been formally made at this point) or the supposed sale process in Canada, the speculation about which comes from a piece of analyst research, not from any comment made by VimpelCom," VimpelCom spokesman Bobby Leach said Monday.
Sources have told The Globe and Mail that Vimpelcom has begun a sale process for Wind Mobile. UBS AG is assisting with the sale process and initial bids were due last month.
It was not immediately known if Altimo was interested in Wind Mobile Canada, but the list of bidders is said to include Wind CEO Anthony Lacavera's holding company, AAL Corp., which is teaming up with Egyptian telecom magnate Naguib Sawiris's investment firm Accelero Capital. Mr. Sawiris, who is Wind's original financial backer, previously built Orascom into a global telecom giant before Vimpelcom acquired majority control.
(Other potential bidders for Wind include Canadian incumbents, such as Rogers Communications Inc., and small carriers like Mobilicity and Public Mobile. Meanwhile, Fairfax Financial Holdings Ltd. is also mulling whether to make a bid for Wind, potentially as part of a consortium or in partnership with another player, according to sources.)
In recent months, Vimpelcom has taken a number of steps through Orascom to formalize its control of Wind Mobile in order to take advantage of recent changes to Canada's foreign investment rules for the telecom sector, which now allow foreigners to control 100 per cent of small carriers.
Last fall, Orascom announced plans to restructure a shareholder loan to Globalive and unveiled a proposal to take majority control by converting its non-voting shares into voting shares. Then earlier this year, Orascom said it was buying out Wind founder Anthony Lacavera. That deal still requires regulatory approval but once it closes, Mr. Lacavera plans to step down as CEO.
Orascom Telecom is the third large firm that is taking steps to leave the Egyptian market this year. In February, Egypt's regulator approved an offer by Qatar National Bank (QNB) to acquire Cairo's National Societe General Bank (NSGB).
Orascom Construction Industries (OCI) is also finalizing a deal with its Dutch-listed parent company OCI NV that may lead it to leave the Egyptian stock exchange.
"It will affect the index market capital which is already impacted by NSGB exiting and OCI, which might happen anytime now, so we are talking about more than 25 per cent of the weight of the index," said Ahmed Adel, telecom analyst at Naeem Brokerage.
"The biggest players in the Egyptian market are OCI and Orascom Telecom and NSGB, and the idea is given the market conditions and the political situation ... you cannot expect a high flow of new listings in the index right now," he added.