Pronounced Reserve bidder in the quest for the acquisition of 9Mobile, Smile Telecoms Holdings Limited, has decried the tardy manner in which Barclays Africa, the financial adviser handling the sale of 9mobile, has so far managed the transaction and called for a process review to uphold transparency. Smile’s angst was contained in a letter addressed to Barclays Africa dated February 21, 2018 and signed by Templars; the company’s solicitors.
In the two-page letter, Smile expressed surprise and disappointment at the manner in which the selection process for the Preferred Bidder and Reserve Bidder was conducted. Of particular concern, to Smile, is the fact that the selection of the Preferred Bidder was announced before the stated deadline of 26 February 2018 as set out in the Process letter.
The company therefore requested Barclays, to as a matter of fairness and urgency, provide a practicable with verifiable (and preferably third-party authenticated) proof that the party that has been selected as the preferred bidder has indeed satisfied all the conditions precedent to that selection.
However, in its reply of February 26, 2018 Barclays Africa promised to “be in touch with Smile to discuss any updates on the Transaction, to the extent considered necessary”. It expressed gratitude for Smile’s continued interest in the Transaction but noted that its clients exercised their rights at their sole discretion to pursue an alternative path to completion of the Transaction. Barclays restated its willingness to explore Transaction completion with Smile should the pending process not reach a satisfactory conclusion.
Thisday gathered from a reliable source close to Smile opined that Barclays Africa’s letter evaded the critical issues of due process and eligibility of the announced Preferred Bidder. The source wondered if the Preferred Bidder was able to meet the laid down requirements for the Transactions that required it to reach agreement on any required financial accommodations with the Syndicate Lenders and the Trade Creditors. The requirement also entails the Preferred Bidder to have firm, unconditional and committed funding for any cash payments and to provide a binding offer that is unconditional, excluding the Formal Licence Approvals.
It would be recalled that the nation’s telecoms regulator Nigerian Communications Commission (NCC) has reassured that only investors with the required technical expertise and financial muscle will buy 9Mobile. A statement signed by the Director, Public Affairs, NCC, Mr. Tony Ojobo, stated that the Commission will ensure that all relevant statutory and regulatory processes are duly complied with in the process leading up to the emergence of new owners for the company.
NCC’s intervention came on the heels of news that Teleology Holding has emerged the preferred bidder for 9Mobile. The announcement was greeted with protests in some quarters. A non-governmental organization Business Renaissance Group (BRG), protested against the process, accusing Barclays Africa of sending the letter Teleology in a hasty and preemptive manner. The group stated that Barclays Africa jumped the gun in announcing a preferred bidder. It noted that in a meeting held with the interested bidders on the 26th of January 2018, Barclays gave the two finalists in the bid process: Teleology Holdings and Smile Telecoms Holdings the opportunity to increase their bid for 9Mobile within 30 days which brought the deadline date to Monday February 26, 2018.
The group wondered why Barclays could not wait till the 26th of February 2018 before its preemptive announcement of a preferred winner. Further alleging bias against Barclays in the handling of the sale of 9mobile, BRG recalled that Barclays had earlier affirmed that any preferred bidder on selection will need to sign a Sales Purchase Agreement immediately and will have to instantly pay a non-refundable deposit of USD 50 million.
It decried a situation where Barclays has now given its announced preferred bidder 21 working days to pay the non-refundable fee of USD 50 million. The group further underscored its allegation of a less than transparent handling of the entire bid process by Barclays Africa by recalling that some of the earlier entrants, among them two major GSM network operators, had opted out of the process alluding to lack of transparency.
It also claimed that at least two major vendors of 9mobile rejected the financial offers of the preferred bidder and had no confidence in weak and unrealistic business plan presented. And wondered how such a bidder with questionable business plan would be able to sustain and improve the operations of 9mobile. BRG contended that the precipitated announcement by Barclays is indicative that the preferred bidder did not satisfy any of the precedent conditions.