Wednesday, Apr 24, 2013

DUBAI (Zawya Dow Jones)--Emirates Telecommunications Corp. (ETISALAT.AD) said Wednesday it will submit a binding offer to buy Vivendi S.A.'s (VIV.FR) 53% stake in Morocco's Maroc Telecom today, an acquisition that would give the Abu Dhabi-based telco a welcome revenue boost amid strong competition in its home market.

Etisalat said the offer is subject to a number of conditions being met and will require regulatory approval in Morocco and other jurisdictions where Maroc Telecom operates.

"Market regulations in Morocco will require Etisalat to make a mandatory offer to minority shareholders, and consequently Etisalat may end up acquiring more than the 53% stake offered by Vivendi," Etisalat said in a statement posted on the Abu Dhabi bourse website.

Etisalat, the Middle East's biggest telecom provider by market value, said it has already secured the required funds for the transaction from local and international banks.

French conglomerate Vivendi S.A. has been trying to shift away from the telecoms business toward focusing on media assets like U.S.-based Universal Music Group and French TV and movie giant Canal Plus. Vivendi has been auctioning off both Maroc Telecom and its Brazilian phone and broadband unit GVT. Its Maroc Telecom stake was valued at roughly 5.5 billion euros ($7.19 billion), people familiar with the matter said in late February.

Earlier this month, South Korea's KT Corp. (030200.SE) dropped its initial bid for the Maroc Telecom stake due to valuation concerns.

Aside from Etsialat and KT Corp., Qatar Telecom (QTEL.DO) and France Telecom (FTE) were among a number of potential bidders that expressed preliminary interest in Maroc Telecom last year.

Etisalat late Tuesday reported a flat first quarter profit after federal royalty as the telco added more customers but suffered pressure on margins. Net profit after federal royalty in the three months ending Mar. 31 amounted to 1.82 billion U.A.E. dirhams ($495 million), from AED1.80 billion in the same period a year earlier.

Write to Tim Falconer at tim.falconer@dowjones.com

(Rory Jones in Dubai contributed to this article.)

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24-04-13 0535GMT