STC fails to strike deal on buying Vodafone Egypt stake

Saudi Telecom Company (STC) said no agreement has been reached to buy a 55 percent stake in Vodafone Egypt, but the parties have agreed to keep the dialogue open. The company said in a bourse statement there was a "misalignment" among the parties involved. 

Vodafone Group said that due diligence had been substantively completed on the sale of its 55 percent stake in Vodafone Egypt to STC. Despite the expiry of the memorandum of understanding signed at the start of the year, Vodafone said it remains in discussion with STC on finalising the transaction in the near future. "Vodafone now looks to STC and Telecom Egypt to find a suitable agreement to enable the transaction to close," the company said.

Telecom Egypt is the other major shareholder in Vodafone Egypt and has previously claimed a right of first refusal on Vodafone's shares. Telecom already operates it own mobile network business, called We. 

Telecom noted the reference to its position in the statements from STC and Vodafone but said it has "no insight" into the discussions or terms being discussed. The company said it had not receive any proposal from either of the two parties involved, but was still considering options as to a right to bid for Vodafone's shares or receive a similar buy-out offer for its own stake. 

STC in January signed a non-binding agreement to buy the stake for USD 2.4 billion, extending the offer in April and again in July. Originally expected to close in June, the deal would have been STC’s biggest in over a decade and valued Vodafone Egypt at USD 4.4 billion. The non-binding agreement was reached before the Covid-19 crisis struck and STC cited logistical challenges caused by the pandemic when it announced a 90-day extension in April.