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By Mark Lee
Feb. 18 (Bloomberg) -- China Unicom (Hong Kong) Ltd., the country’s second-biggest mobile-phone carrier, denied the Nigerian government’s statement that the company is involved in a bid to buy control of Nigerian Telecommunications Ltd.
Neither Unicom nor its unlisted parent participated in the bidding for Nitel, as Nigerian Telecommunications is known, Sophia Tso, a Hong Kong-based spokeswoman for the Chinese company, said by phone today. Joseph Anichebe, spokesman for Nigeria’s Bureau of Public Enterprises, wasn’t immediately available to comment when called on his mobile phone.
New Generation Telecom Ltd., a group made up of China Unicom, Minerva Group and GiCell Wireless Ltd., was selected as the preferred bidder for Nitel, Nigeria’s National Council on Privatization said at press briefing in Abuja this week. The investors’ group beat rival bidders including Omen International Ltd. with an offer of $2.5 billion for a 75 percent stake in state-owned Nitel, according to the privatization body.
“Unicom has enough to do in China, and I hadn’t expected them to go overseas,” said Bertram Lai, who rates the Unicom shares “neutral” at CIMB-GK Securities in Hong Kong.
Unicom shares fell 1.6 percent to HK$8.85 at the midday break in Hong Kong trading, compared with a 0.1 percent decline in the city’s benchmark Hang Seng Index.
Parent Denies
Unicom, based in Beijing, said last year it would raise capital spending to 110 billion yuan ($16 billion) in 2009 to roll out third-generation wireless networks nationwide. The company faces competition from rival high-speed services offered by China Mobile Ltd. and China Telecom Corp.
China United Network Communications Group Co., the state- owned parent of Unicom, also denied it’s involved in the Nitel bid, Tso said.
At $2.5 billion, the price for the stake in Nitel was “relatively high,” Nomura Holdings Inc. analyst Danny Chu wrote in a report yesterday. Nitel’s annual earnings before interest, tax, depreciation and amortization was estimated at about $13 million, according to Chu.
Omen International’s $956 million bid was the next highest after that of New Generation, according to the Nigerian government. MTN Group Ltd., Globacom Ltd., Brymedia (WA) Ltd., Spectrum Group were also short-listed, according to a Feb. 8 statement from by the Bureau of Public Enterprises.
Nitel has lost market share to private operators licensed since 2000, including MTN Nigeria Ltd., and its employees are currently owed 17 months of wages, according to the Bureau of Public Enterprises. A previous attempt to sell the company was annulled after Transnational Corp., a Lagos-based investment company, failed to comply with sale conditions.
