[business day] China Unicom and Telecom Corporation of New Zealand said yesterday that they did not participate in a government auction to buy Nigerian Telecommunications, contradicting a public announcement this week and throwing the deal into doubt.
Neither Unicom nor its unlisted parent joined the bidding for Nitel, as Nigerian Telecommunications is known, Unicom spokeswoman Sophia Tso said yesterday. Telecom Corporation’s Telecom New Zealand also confirmed it was not part of the group bidding for Nitel, spokesman Mark Watts said.
Nigeria’s privatisation agency short-listed five investor groups in the auction for state-owned Nitel. The government said this week that a group led by Unicom, China’s number two cellphone carrier, made a 2,5bn offer, and was the preferred bidder.
The offer for a 75% stake in Nitel was “relatively high” compared with the valuation in Bharti Airtel’s proposed 9bn purchase of the African wireless assets of Kuwait’s Zain, Nomura Holdings analyst Danny Chu wrote in a report after the announcement on Wednesday.
Nitel’s annual earnings before interest, tax, depreciation and amortisation (ebitda) were estimated at 13m, Chu said.
Bharti Airtel’s bid for the Zain assets was valued at about 7,4 times ebitda, while paying 2,5bn for the Nitel stake would be equivalent to more than 100 times ebitda, according to Chu.
China Unicom fell 1,3% to HK8,87 in Hong Kong trading compared with a 0,5% decline in the benchmark Hang Seng index. Telecom Corporation was unchanged at NZ2,34 on the New Zealand Stock Exchange.
New Generation Telecom, a group made up of Unicom, Dubai’s Minerva Group and Nigeria’s GiCell Wireless, was selected as the preferred bidder for Nitel, Nigeria’s National Council on Privatisation said on Tuesday. It said Telecom New Zealand International was the “technical partner” of a separate bidding group led by a special- purpose vehicle called Brymedia West Africa.
Yesterday, GiCell said it had financial backing for the bid from Dubai’s Minerva Group.
GiCell MD Usman Gumi said the firm’s involvement extended only to an interest in offering technical and managerial support. “We have a firm commitment from our investors and partners, the Minerva Group … We didn’t pull all this out of the air. We believe Nitel is worth the amount because of the infrastructure and potential that it has,” Gumi said.
Unicom, Telecom deny bid for Nitel