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Authorities in Tunisia and Malta are examining proposed takeover deal due to cross-ownership issue.
Regulators in both Malta and Tunisia are examining Tunisie Telecom’s acquisition of Maltese quad player Go on the grounds that the companies have a common shareholder, giving rise to a potential conflict of interest.
Tunisie Telecom offered €2.87 per share in cash for Go a month ago, with a 24 June-22 July acceptance period for shareholders. In its most recent update shortly before the opening of the acceptance period, Go announced that its largest shareholder, Emirates International Telecommunications (EIT), which holds 60% of its issued ordinary share capital, had indicated that it would accept the offer.
EIT also holds a 35% stake in Tunisie Telecom, the remainder being in the hands of the government. It is this cross-ownership that has triggered regulatory scrutiny, the Times of Malta reported on Wednesday.
The paper cited unnamed sources as saying that regulatory authorities in both countries are looking at the deal, noting that Go had other options on the table than a sale to Tunisie Telecom. Indeed, the company selected Tunisie Telecom as its preferred bidder ahead of Bahrain’s Batelco.
EIT’s apparent desire to offload its Tunisie Telecom stake appears central to the case.
The paper’s sources noted that the deal is being viewed in Tunisia as a way for EIT to monetise its stake in Tunisie Telecom, which is in weak financial shape and "in no position to make such investments" as the Go Malta deal. It would require a substantial loan to finance the deal.
Meanwhile, EIT has been looking to sell its stake in Tunisie Telecom since 2013, but has thus far been unsuccessful. The Times of Malta quoted an EIT spokesman as saying that the stake is still for sale.
The paper also contacted the Malta Communications Authority, which confirmed that it has not yet approved the deal.
There has been no further formal comment from Go since its June update statement, in which it announced that its board believes the acquisition will be beneficial to the company, with Tunisie Telecom committed to investing in Malta and supporting Go’s plans to invest in 4G, fibre-to-the-home (FTTH) and data centre spaces. It also noted that it does not expect any changes to Go’s employment structure or employment conditions as a result of the transaction.
