One month after the curtain was drawn on the bidding process for the takeover of 9mobile, formerly Etisalat Nigeria, by no fewer than six companies, indications have emerged that Teleology Holdings Limited promoted by Adrian Woods, the pioneer chief executive officer of MTN Nigeria, has been penciled down as the preferred bidder.
Barclays Africa, the bid transaction advisor, is said to have forwarded the name of the company as preferred bidder for the fourth largest mobile telecommunication network in Nigeria to the National Communication Commission, NCC.
This development may have brought to an end the acquisition process supervised by Barclays Africa, the transaction advisors.
Teleology is said to have been considered as the new owner of 9mobile ahead of Smile, which had been the only other bidder in the final round of the takeover bid.
Though over 10 bidders had indicated interest in acquiring the mobile network, only five were shortlisted before the number was further reduced to three.
While Globacom and Helios failed to back their technical bids with concrete financial bids, Airtel later pulled out of the process, leaving just Teleology and Smile Communications.
Teleology, a private equity firm with an investment portfolio of $11 billion, emerged the preferred bidder with $500 million offer to acquire the mobile network while Smile offered about $300 million.
Barclays Africa, the financial adviser to NCC on the sale of 9mobile, according to findings, has already forwarded the letter to Teleology naming it as winner of the bid for 9mobile.
Going by the sales requirements, Teleology is required to make a non-refundable deposit of $50 million within 21 days of receiving the letter which was dated February 21 or risk losing the bid to the reserved bidder Smiles Telecommunications Limited.
According to industry watchers, the pending entry of Teleology is viewed as the return of Adrian Wood of MTN into Nigeria’s mobile telecommunication market.
Findings further revealed that based on the development, Teleology promoters are said to have already reached out to Mathew Wilshere, former Chief Executive Officer of then Etisalat to rejoin them in that capacity after the payment is completed.
Their preference for Wilshere who had joined Mike Adenuga’s Conoil as Managing Director is believed to be anchored on his managerial prowess while serving as CEO of Etisalat before it was rebranded to 9mobile due to debt repayment tango with consortium of banks.
The development is said to have come as a source of joy to staff of 9mobile and the consortium of banks that are waiting on the brink with expectation for their loan.
They view it as a positive development for the Nigerian telecommunication industry as well as 9mobile.
According to a source from the lending banks, the emergence of a preferred bidder in a relatively smooth bidding process sends a positive message to the international community that solutions can always be found to financial crisis.
The Next Edition gathered that there is jubilation among staffs of 9mobile on the outcome of the bidding process which had hitherto created an unhealthy air of uncertainty among them especially on their fate.
The joy of the staff, it was gathered, is borne out of the fact that no existing mobile provider in the country like Globacom, MTN and Airtel that indicated interest emerged the preferred bidder.
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According to some staff who spoke on condition of anonymity, they did not want any of the existing operators to acquire 9mobile as they would end up sacking many of them under the guise of right sizing or downsizing.
They also lay credit of the smooth sail of the bidding process and securing new investors on Boye Olusanya, the chief executive officer of 9mobile and his marketing team for their dexterity in searching for investors as well as retaining apprehensive subscribers from opting out of the network.
Amid the crisis that engulfed Etisalat and the transition to 9mobile with the search for new investors, the network providers through its marketing unit had entered into several strategic partnerships to improve customer services with innovative products and services that improved their financial fortunes.
This very act is said to have not only restored the confidence of customers but impressed the two leading contenders by convincing them it would be possible to pay the debt to the consortium of banks as they are not taking over a financially distressed company.
With the recommendation of Teleology which is still being studied by the NCC and CBN, the telecommunication regulatory agency will soon make pronouncement of the outcome of the bidding process with the announcement of Teleology.
However, the bidding process though smooth so far was not without hitches going by a court injunction which was obtained by Spectrum Wireless Communication seeking the stoppage of the sale of 9mobile.
Spectrum claimed that it invested over $35 million in the Etisalat, now 9mobile, and that the repayment was not factored into the planned sale of the network provider.
The injunction we gathered was successfully appealed and based on the bidding process rules, once a case has been appealed, all parties involved are expected to maintain status quo.
This very fact we gathered led to the sale process not being stalled by the court injunction.
The race to acquire 9mobile began months ago with 16 companies submitting expression of interest, which is the first stage in a bidding process.
The firms were Globacom, MTN; Bharti Airtel; ntel which acquired defunct federal government owned NITEL and Mtel; Bua Group promoted by Alhaji Abdulsamad Rabiu and Morning Side Capital Partners by former Managing Director of Diamond Bank Alex Otti; Africell, a subsidiary of Lintel; Obot Etiebet & Co of the former Petroleum Minister, Don Etiebet; Blackstone Equity; Telelogy Holdings and De-elim Services Limited.
Others were Smile Telecoms Holding, Veittel, owned by an investment arm of the Vietnamese military with assets in Africa, AB-Bro Limited, a Nigerian joint venture company, Hamilton and Goerge International Limited and Helios.
Prior to the closure of the bidding process on January 16, 2018, five companies were shortlisted from the 16 that entered the race to acquire 9mobile.
They are Globacom, a Nigerian mobile network owned by Mike Adenuga, Teleology Holdings Limited owned by Adrian Wood, former CEO of MTN Nigeria, Bharti Airtel, an Indian telecommunication company that currently owns majority stake in Airtel Nigeria; Smile Telecoms Holdings, a telecommunication company operating in Nigeria, South Africa, Congo DR, Tanzania and Uganda and Helios Investment Partners LLP said to be a telecom investment company.
Trouble times for 9mobile, formerly Etisalat, began when it could not repay the N541 billion syndicated loan advanced to it by a consortium of 13 banks led by Access Bank in 2013 to fund upgrade of its network and finance an existing $602 million loan.
The problem deepened when its major investor, Mubadala of United Arab Emirates with 70 per cent share equity pulled out of Etisalat due to the debt issue after the banks moved in to take possession of the telecomm company.
It was this development that led NCC and CBN to wade in and save the firm which was on the brink of crash.
The intervention led to dissolution of Hakeem Bello-Osagie board and replacement with interim board led by Joseph Nnanna.
The other new board members are Oluseyi Bickersteth, Ken Igbokwe, Boye Olusanya (CEO) and Funke Ighodaro, chief operating officer.
The shortlisted bidders after scaling three bidding processes to the final stage were given approval to access the data room of 9mobile in order to enable them access the financial situation of the company and subsequently make bids for the takeover of the company.
Under the rules governing the sales process, NCC and CBN after having been notified by the interim board the recommendation of Barclays on the preferred bidder, the winner of the bid will then have to apply to NCC to commence the processes for securing the regulatory approval from the board of the commission to give full effect to the transfer.
Again the winner, according to the rules, would undergo another due diligence regarding NCC compliance with licensing conditions, security checks and clearance and most importantly, the protection of national interest.
Indeed the crisis that rocked Etisalat which led to the change in its management led to the network provider losing close to five million subscribers in the past one year according to industry statistics.
Like Airtel that changed its name five times in its over 15 years of operation in Nigeria, there is every indication that another name for 9mobile will emerge when the preferred bidder completes the acquisition process.
