Rumours in social media and in some blogs that Globacom has acquired 9 Mobile is not true. This is because the transaction is still at the bidding stage and as such is not yet conclusive.
An acquisition can only be said to have been conclusive after a winner of the bid is announced, regulatory approvals obtained and purchase consideration made. The NCC has also denied it.
The Nigerian Communication Commission had given prospective bidders of 9 Mobile, up till Jan. 16 as deadline for receipt of binding offers.
Steps to concluding the deal
- After submission of the bids, Barclays Africa will review the bids and make recommendations to 9mobile.
- 9 Mobile will accept the bids and convey their acceptance to the regulators
- Whoever wins the bid will now apply to NCC to obtain regulatory approvals, giving full effect of the transfer.
- Timeline to pay the purchase consideration is communicated to the winner of the bid.
- The reserve bidder is also notified
- Payment is made and post acquisition activities commences
Why the rumour
It is not clear where this information emanated from, however, this is not the first time we are hearing this. Ironically it is often in the best interest of the acquirer that rumours like this persist. For example, it drives sentiments towards the acquirer and provides an air of finality to the transaction. In fact, rumours that Glo has acquired 9 Mobile has been swirling since last year.
It also increases cold feet among skeptical rival bidders who believe information like this can further impair on the underlying value of 9 mobile. For example, it could force 9 mobile users who do not want to be. Glo subscriber to port.
9 Mobile has seen its subscriber base dip from 20.5 million in January 2017 to about 17 million in November 2017. However, this is mostly attributed to cancellations following the SIM card registration exercises, as other networks also recorded significant declines. 9 Mobile users have stuck with the company despite the challenges faced since 2017.
Globacom, however appears to be in a strong position to win the bid, considering the trajectory of the bid process. This does not in anyway confirm that they will win the bid or have won the bid.
