The latest revelation in the ongoing saga of Teleology Holdings’ acquisition of Nigeria’s 9mobile indicates that the winning bid for the unit was in fact $200 million less than initially reported.
Nigerian newspaper This Day claimed that “the public was made to believe” that Teleology had paid a non-refundable deposit of $50 million for 9mobile, and was due to pay a remainder of $450 million. However, this figure has been cast into doubt by one of the companies handling the acquisition.
Last month, the Nigerian Communications Commission (NCC) submitted to the country’s House of Representatives a letter sent by United Capital Trustees. In it, the company stated that Teleology owed only $251 million - $200 million less than the previously reported balance. At around the same time, a Nigerian federal court stated that the deal should be delayed while a shareholder issue was resolved.
If the amount stated in the letter is the actual balance owed by Teleology, then the winning bid was just $1 million more than reserve bidder Smile Telecoms’ offer of $300 million. Prior to Teleology paying its deposit, there was significant uncertainty over whether it would go ahead with its acquisition, and during this time Smile repeatedly expressed its willingness to honour its reserve bid – along with its belief that it would do a better job of improving 9mobile’s position.
Additionally, Smile has voiced its dissatisfaction with the way Barclays Africa has been managing the deal, pushing for a review of the bidding process. It is therefore likely that Smile will contest this discrepancy in the figures.
The NCC’s Umar Garba Danbatta has noted that whichever operator ends up taking over 9mobile will need to demonstrate that they have the technical capabilities to do so.