China Mobile to bid for Millicom
Mainland carrier eyes all-cash US$4b offer for the Swedish operator
China Mobile Communications is expected to make an all-cash bid for shares in emerging-markets telecommunications group Millicom International Cellular after the latter's biggest Swedish shareholder told analysts it wanted straight cash.
A Hong Kong-based spokeswoman had denied reports that either China Mobile Communications or its parent was making a US$4 billion bid for Millicom. But sources from Britain and Hong Kong had confirmed that the parent of Hong Kong-listed China Mobile had been talking with the Nasdaq and Stockholm-listed Millicom as early as last year.
Millicom investor relations officer Andrew Best said yesterday they were continuing a strategic review of the company's future direction with the help of financial adviser Morgan Stanley.
'We got strong interests from a number of parties,' said Mr Best, without elaborating.
Analysts said a final decision could be expected over the next two weeks.
'Millicom's shareholder, Kinnevik, had told investors and analysts that they would opt for an all-cash option if they could dispose of their holdings. A sale is likely to lead to a delisting of the Millicom shares,' said Erik Pers, an analyst at Nordic investment bank Carnegie.
'A cash-and-share deal would be a complicated transaction for this Nasdaq-listed company and the other financial institutions shareholders in Millicom would opt to exit for cash rather than becoming shareholders of an unfamiliar new owner [of Millicom],' he added.
Swedish telecommunications and media giant Kinnevik controls 38 per cent of Millicom, followed by Swedish pension fund manager Robur, which holds 8 per cent.
Millicom had net profit of US$3.91 million and revenue of US$1.08 billion last year.
Merrill Lynch is advising China Mobile's parent on the deal.
Sitting on a net cash of 68.41 billion yuan and a low 12.2 per cent total debt to book capitalisation, the company can comfortably finance the deal from its cash hoard.
