Global Telecom shares fall after Veon withdraws buyout offer

04 Apr 2018

Shares in Global Telecom Holding GTHE.CA fell by more than 15 percent on the Egyptian stock exchange on Tuesday after majority shareholder Veon VON.AS withdrew an offer to buy the rest of the Egyptian-based company and said it would not make another.

Amsterdam-based Veon, which owns about 57 percent of Global Telecom, had made an offer for the remaining 42.3 percent of the company in November at 7.9 Egyptian pounds per share.

But Veon said on Tuesday it was withdrawing the offer and had no intention of making another 'given the lapse of time and absence of approval' by the Egyptian regulator.

The Egyptian Financial Supervisory Authority (EFSA) did not immediately respond to calls for comment on the reason behind the delay.

Egyptian law requires that EFSA respond to offers submitted within two business days from the date in which the company completes all documents required for the offer.

GTHE said Veon had notified it of the withdrawal of its offer and that Veon did not intend to make another 'mandatory purchase offer' at the current time.

Veon's withdrawal comes one week after its chief executive Jean-Yves Charlier resigned, ending a three-year stint in which he led the telecommunications company, formerly known as Vimpelcom, through a period of upheaval and repositioned it as an internet services provider.

Shares in Global Telecom, which provides mobile telecommunication services in Africa and Asia, had fallen about 15.5 percent on the Egyptian bourse to 5.64 Egyptian pounds as of 1000 GMT.

'There is no financial or operational impact (on GTHE) from the withdrawal of Veon's offer. The impact is going to be on the stock because all of the shareholders were hoping to sell at the offer price of 7.9 pounds per share,' Ahmed Adel, a telecom analyst at Beltone Financial, said.

GTHE is one of just three stocks that make up the MSCI Egypt Index, an index that measures the performance of large and mid-cap stocks on the Egyptian bourse.

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