South Africa’s Vodacom and UK-based Virgin Mobile have announced that they will make a joint bid for a controlling stake in Nigeria’s third-largest cellco Vee Networks (which trades under the V-Mobile brand name). The takeover attempt is expected to be successful following the news that the V-Mobile board have already voted in favour of a tie-up with Vodacom, little more than a year after the South African company exited Nigeria. Vodacom and Virgin were originally expected to have been bidding rivals, rather than partners, for the stake.
However, according to local news sources, any buyout will have to wait until a legal claim by former V-Mobile shareholder and manager Econet Wireless is resolved. Econet Wireless was forced to give up its shareholding in V-Mobile in early 2004 and saw its management contract for the cellco handed to Vodacom amid claims that its business dealings were not transparent. Earlier this week an international tribunal referred the case to a new panel to be appointed by a Nigerian court.
Vodacom itself withdrew from its five-year contract to manage V-Mobile in June 2004, barely two months after entering the country, when its presence split the operator’s boardroom and led to an investigation by Nigeria’s primary anti-corruption agency, the Economic and Financial Crimes Commission (EFCC). V-Mobile is currently controlled by First Bank of Nigeria, Broad Communications, First City Asset Management, Ocean and Oil Networks, Bromley Limited, Leadway Assurance and investment companies in Lagos, Delta and Akwa Ibom states.