Vodafone set to increase stake in Egyptian unit

AMSTERDAM, Nov 8 (Reuters) - Vodafone Group has offered to increase its stake in Vodafone Egypt by tendering for shares which are mostly held by Telecom Egypt , the British company said on Wednesday.

The two carriers said they will collaborate on services as Vodafone offered to buy an additional 4.9 percent of Vodafone Egypt for up to 108 million pounds ($206 million).

"Telecom Egypt has given an irrevocable undertaking to accept the tender in respect of at least 3.97 percent and up to 4.69 percent of the shares in Vodafone Egypt," Vodafone and Telecom Egypt said in a joint statement.

The few Vodafone Egypt shares still trading freely on the Cairo stock exchange were up 5 percent at 94.48 pounds by 1007 GMT.

Vodafone, which already owns a 50.1 percent majority stake in Vodafone Egypt, can raise its holding in its Egyptian subsidiary to 55 percent, with 45 percent held by Telecom Egypt as Vodafone aims to increase its presence in emerging markets.

It has recently raised holdings in mobile operators in India, Turkey, Romania and South Africa.

SWISSCOM

Separately on Wednesday Swisscom's Chief Executive Carsten Schloter said he was looking into buying back Vodafone's 25 percent stake in the Swiss firm's mobile unit but there was no decision or timing.

"We have discussions with Vodafone from time to time about the nature and the future of our partnership," he said.

A Vodafone spokesman confirmed there have been on and off discussions to sell the stake, but gave no further details. In conjunction with the offer for the Vodafone Egypt shares, Vodafone and Telecom Egypt will restructure the board of Vodafone Egypt to reflect the new shareholdings and work together in developing and selling each other's services.

Telecom Egypt is the country's only fixed line operator.

The tender offer comes one month after Telecom Egypt increased its stake in Vodafone Egypt by nearly 23.5 percent in a deal valued at 5.63 billion Egyptian pounds ($981.5 million), bringing its total stake to nearly 49 percent.

Vodafone Egypt competes head to head with Egypt's second mobile operator Mobinil , each carrier having around 8 million subscribers.

Egypt Telecom increased its stake in Vodafone Egypt after failing in its bid for the country's third mobile phone network licence, which was won by Etisalat of the United Arab Emirates.

Shares in Telecom Egypt were up 0.8 percent at 15.32 pounds by 1007 GMT. Vodafone shares in London traded 0.2 percent lower at 132.75 pence, slightly outperforming a 0.4 percent weaker DJ Stoxx European telecoms sector index .

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