Monday, May 18, 2009

Court Action Delays ICASA Approval of Vodafone Acquisition

South Africa's telecoms regulator has unexpectedly reversed an earlier decision and will no long wave through Vodafone's acquisition of a majority stake in Vodacom. The regulator cited court action by the Congress of South African Trade Union (COSATU) as the main reason for its decision to delay approval.
Vodafone is currently trying to buy a 15% stake in Vodacom, which is currently 50:50 owned by Vodafone and local landline operator, Telkom. The company has offered ZAR 22.5 billion (US$2.47 billion) less the attributable net debt of Vodacom at the date of signing subject to, inter alia, the listing and unbundling of Telkom's remaining stake of 35% in Vodacom to Telkom shareholders.
As the proposed takeover is being opposed by the unions, the regulator issued a brief statement that it felt the legal uncertainty made it difficult to offer regulatory authority for the takeover. A series of public hearings has now been called for the middle of next month. The union has been objecting to the takeover as it would result in a foreign firm owning a majority stake in the mobile network operator - although Vodacom itself owns several mobile networks in other countries.
The move has also thrown the planned listing of the remaining 35% stake onto the Johannesburg Stock Exchange's (JSE) into doubt, although all parties are still saying that they expect the listing to go ahead as planned.

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