Just recently, we reported that Teleology had acquired 9mobile with the payment of a $50 million non-refundable deposit required. But more recent news is giving the acquisition process a new tune.
Aside Teleology, another telco that placed a bid for the acquisition was Smile Communications with $300 million against Teleology’s $500 million.
The Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) are the two concerned regulatory agencies with interest in the acquisition, but Barclays Africa is the appointed financial adviser in charge of the acquisition process.
While having two government agencies overlook a deal might be a case of two heads that are better than one, ironically it appears the reverse is the case.
Even the legislative arm of government which is not a party to the deal is not helping either.
A report by Technology Times has it that the Chairman, House Committee on Telecommunications, Saheed Akinade-Fijabi threatened that the lower house of the National Assembly — the House of Representatives — may be forced to put a stop to the sale of 9mobile.
Also, the board chairman of NCC, Olabiyi Durojaiye was reported to have made moves to have the company sold to Smile Communications instead, by coming up with a new set of criteria for the acquirer.
According to The Cable, Durojaiye, who has never written on behalf of the regulator about 9mobile since the inception of the acquisition process, wrote a letter to CBN with objections about selling the company to Teleology and while also maintaining that the acquirer must have a certain technical expertise with a minimum of 3 years operational history.
All these are coming after Teleology Holdings Limited — a special purpose vehicle (SPV) put up by some influential Nigerians — made a $50m non-refundable cash deposit requirement for the acquisition.
While United Capital Trustees, the trustee for the owners of 9mobile, reportedly acknowledged the receipt, both NCC and CBN, on the other hand, did not acknowledge the said payment.
This begs the question of what’s becoming of the entire acquisition process as well as the government interest.
Did NCC not do its homework regarding the technical requirement of the acquirer before giving Barclays Africa the full control of the entire acquisition process? Another question — what’s the interest of NCC or its chairman in Smile Communications?
As it appears, the government agency is trying to change the goalpost in the middle of the match.
Globacom was rumoured to have bought 9mobile after which NCC released a statement which neither confirms nor accepts the claim.
The statement, which restated Barclays Africa’s role in the emergence of a buyer for the company, only claimed that Barclays Africa did not authorise any publication regarding Globacom’s interest.
Teleology vs Smile Communications
If eventually, Teleology doesn’t get 9mobile, that means Smile Communication as the preserved bidder gets the offer.
Teleology already entered an alliance with Safaricom, the largest network operator in East Africa, which could be an advantage for Teleology if the new set of criteria are no longer at play.
9mobile subscribers could be in for a treat from the Teleology’s partnership with Safaricom, the mobile money space in Nigeria could also get a face-lift.
Buttressing Smile Communications’ interest, its Executive Director of Operations, Ahmad Farroukh reportedly said 9mobile will be made more attractive and competitive within 3 months if Smile should buy the company.
“We will bring three-dimensional values to 9mobile if given the opportunity to acquire it. The first value is that we are Nigerian company already existing in the Nigerian telecoms space. So we will come up with our existing assets to boost the 9mobile operations. We will seek the permission of NCC to flip our existing 800MHz frequency to 9mobile to enhance its operations. What we are bringing to 9mobile is huge.”
Worthy of note is that the Government of Kenya owns 35% of Safaricom shares and we surely can’t ask the Nigerian government to take ownership of 9mobile if there’s ever lessons from past experiences.
Nigerian startups raised $17.6m in Q1 2019, 8.5% higher than they did in Q1 2018. Find out more in the latest quarterly edition of the Nigerian Startup Funding Report here.