Saudi Telecom likely to cut cash offer for Vodafone Egypt by 30% – analyst

Saudi Arabia’s largest telecoms operator Saudi Telecom Co (STC) is expected to cut its non-binding $2.39 billion offer for a stake in Vodafone Egypt by 30 percent, a chief analyst said on Tuesday.

Amr El Alfy, head of research at Prime Securities, told Amwal Al Ghad that STC’s cash offer is likely to reach $1.67 billion, saying Vodafone Group saw its London-listed shares falling by 31 percent after the two parties announced a preliminary agreement on January 29.

The Saudi company aims to reduce its non-binding offer for Vodafone’s 55 percent stake in Vodafone Egypt, two people with direct knowledge of the talks told Bloomberg on Monday.

The move came as STC wants to take advantage of lower stock prices and the global economic slowdown triggered by the coronavirus pandemic, El Alfy added.

The current discussions to cut the offer demonstrates STC’s genuine keenness to acquire a majority stake in Vodafone Egypt, he said.

STC decided to restart discussions as a deadline nears for the company to move ahead with the non-binding offer first made in January. In July, the Saudi company extended the memorandum of understanding for 60 days due to the impact of the pandemic.