Safaricom issues cautionary statement over Essar deal

March 4, 2014
Shares

,

Safaricom said it has already entered into discussions with Essar Telecommunications on how to go about the acquisition hence the need for its shareholders to be keen while transacting any business at the bourse/FILE
Safaricom said it has already entered into discussions with Essar Telecommunications on how to go about the acquisition hence the need for its shareholders to be keen while transacting any business at the bourse/FILE
NAIROBI, Kenya, Mar 4 – Safaricom has issued a cautionary statement to its shareholders on the planned acquisition of a stake at its competitor, Essar Telecommunication Limited, which owns yuMobile in Kenya.

Safaricom said it has already entered into discussions with Essar Telecommunications on how to go about the acquisition hence the need for its shareholders to be keen while transacting any business at the bourse.

“The proposed transaction may have an effect on the value of the shares of Safaricom. Accordingly, shareholders and the public are advised to exercise caution in relying on the information in the public domain in relation to the transaction when dealing with the Safaricom shares,” the telco said in a statement.

Safaricom however said the proposed deal is subject to obtaining all necessary regulatory approvals.

The leading mobile operator plans to buy Yu’s infrastructure which include the base stations which will support its efforts to improve the network quality.

“The Directors of Safaricom wish to advise its shareholders and the public that Safaricom has entered into discussions for the acquisition of some of the assets of Essar Telecommunication Limited,” Safaricom said.

Recent media reports say Safaricom has joined hands with its other competitor Airtel to buy off Yu at a total cost of Sh8.6billion ($100million), a move that is expected to bring change in the industry.

Airtel is on the other hand expected to acquire the 2.7 million Yu customers who will cross over without changing their identities.

Since entering the Kenyan market in 2008, Essar Telecom has been struggling to break even while relying on its parent company to run most of its business.

According to the latest statistics by the Communications Commission of Kenya (CCK), yuMobile holds a markets share of 8.8 percent in the country, a head of Orange at 7.1 per cent.

Safaricom continues to dominate the market, controlling 66.5 per cent of the subscriber share, followed by Airtel with 17.6 percent.

Shares

Latest Articles

Stock Market

Most Viewed