PapaBrowne:

I think the only priced asset Nitel's got is Market access! Access to the Nigerian Telecom Market is priceless by any standard.
Interesting thing is that they got access to  three platforms all in one: Mobile(MTel),  Fixed Line(Good for broadband) and SAT 3.
They know why they paid such a price. If they invest the right amount, they'll get their money back in a short while.
Its the Chinese, their approach to business is different!!

Do u mean different as in stingy?

sulad82i:

Do u mean different as in stingy?

They aren't exactly stingy! Big time Chinese Companies aren't exactly stingy! They are known for paying staggering prices for targets they perceive as strategic to their global vision! It was the Chinese who offered to pay $50billion for certain oil blocks in Nigeria!

Nigeria never ceases to amaze me:

. . . . . .

On Thursday, however, the hype over the Nitel deal gave way to bewilderment as C[b]hina Unicom denied any involvement in the bid.[/b]

As the initial news of China Unicom’s involvement came straight from officials of Nigeria’s National Council on Privatisation at press briefing in Abuja this week (and was duly reported by news organisations ranging from the FT to Bloomberg and Reuters and the Wall Street Journal) clearly, someone is lying.

Nigeria is clearly a nut house. No heads will roll over this:

A single big deal in African telecoms might look like a bold gamble, (or a very expensive bout of M&A whimsy). But two in a week, worth a combined $13.2bn, made it look like the Chinese and Indians know something about the prospects for African telecoms that some other big telco players don’t. Actually it now seems that some people – including the Nigerians – don’t even know who’s bidding for what.

We’re talking about the planned $10.7bn deal by India’s Bharti Airtel for the African telecom assets of Kuwaiti group Zain, announced on Tuesday, and the $2.5bn bid for a majority stake in Nitel, Nigeria’s former state telecom monopoly, by New Generation, a consortium that was widely reported on Wednesday to have included China’s Unicom as well as Minerva, of Dubai, and GiCell, a small Nigerian telco .

On Thursday, however, the hype over the Nitel deal gave way to bewilderment as China Unicom denied any involvement in the bid.

As the initial news of China Unicom’s involvement came straight from officials of Nigeria’s National Council on Privatisation at press briefing in Abuja this week (and was duly reported by news organisations ranging from the FT to Bloomberg and Reuters and the Wall Street Journal) clearly, someone is lying.

This raised eyebrows on this thread, the premium between the winning bid and the runner up bid.

Regardless of whether China Unicom is involved or not, the New Generation bid $1.5bn more than the second-highest offer for troubled Nitel, causing some investors to wince at the price tag for a company that clearly has some big problems.

http://ftalphaville.ft.com/blog/2010/02/18/152286/a-watershed-moment-for-em-telecoms/

hina Unicom (Hong Kong) Ltd. and Telecom Corp. of New Zealand said they didn’t participate in a government auction to buy Nigerian Telecommunications Ltd (Nitel), contradicting a public announcement by the Bureau of Public Entreprises (BPE) the government agency superintending the sale of Nitel.

Neither Unicom nor its unlisted parent joined the bidding for Nitel, Sophia Tso, a Hong Kong-based spokeswoman for the Beijing-based company, said by phone today. Telecom Corp.’s Telecom New Zealand isn’t part of a group bidding for Nitel, said Mark Watts, spokesman for the Auckland-based company said by phone, Bloomberg reports.

The BPE shortlisted five investor groups in the auction for state-owned Nitel, which has lost market share to private operators entering Africa’s fastest- growing phone market. The government this week said a group comprising Unicom, China’s No. 2 mobile carrier, submitted a $2.5 billion offer, and was chosen as preferred bidder.

The purported offer for a 75 percent stake in Nitel was “relatively high” compared with the valuation in Bharti Airtel Ltd.’s proposed $9 billion purchase of the African wireless assets of Kuwait’s Zain, Nomura Holdings Inc. analyst Danny Chu wrote in a report yesterday. Nitel’s annual ebitda, or earnings before interest, tax, depreciation and amortization was estimated at about $13 million, according to Chu.

Bharti Airtel’s bid for the Zain assets was valued at about 7.4 times ebitda, while paying $2.5 billion for the Nitel stake would be equivalent to more than 100 times ebitda, according to Nomura’s Chu.

If we use Bharti's bid for Zain of 7.4 multiples of earnings as a benchmark and the $13 million annual earnings estimate, NITEL is worth $96.2 million. A far cry from the reported $2.5bn. Even if you adjust for the incredible potential that a huge market like Nigeria promises, no serious offer will be north of $1bn.

http://www.businessdayonline.com/index.php?option=com_content&view=article&id=8581:chinaunicom-telecom-nz-deny-involvement-in-nitel-bids&catid=1:latest-news&Itemid=18

NITEL and america wonder again