Saudi Telecom Company (STC) is required by law to submit a mandatory tender offer (MTO) for the 44.8% stake in Vodafone Egypt owned by Telecom Egypt (TE) and the 0.2% held by minority shareholders if it closes its bid to acquire the other 55% from Vodafone Group, in accordance with the Capital Markets Law No. 95/992, a source in the Financial Regulatory Authority (FRA) said. The law stipulates that an MTO must be presented by any party acquiring a majority stake in a company that has sold its shares through a public offering in a primary market at any point in time, even if the company is no longer listed at the time of acquisition. This applies to Vodafone Egypt, which was listed on the Egyptian Exchange (EGX) until 2007. The source noted that the conditions required to exclude STC from submitting an MTO are not available in this transaction unless the FRA agreed to exempt STC. Article 353 of the law mentions the conditions required to obligate bidders to present an MTO, which include the acquisition of more than one-third of capital or one-third of voting rights, or the acquisition of more than half of the capital or half of the voting rights. The MTO is also applied in the case of acquiring more than half of the capital or half of the voting rights not exceeding 75%, or in the case of acquiring more than 75% of the capital or voting rights. Continued on page 3
