KEY THEMES
The 8-month saga concerning the potential sale of Vodafone Egypt [VODE] continues to unfold. Yesterday, we heard from the three parties that are either directly or indirectly involved in the deal, first it was STC [KSA: 7010] then Vodafone Group [VOD] and later on Telecom Egypt [ETEL] (please read the news below). The ball is still in STC’s court to make an offer for VOD’s 55% stake in VODE, but ETEL has its options too. If ETEL were to make a counterbid leveraging up, we believe ETEL’s share would be worth around EGP16/share, assuming a 4.0x LTM consolidated EBITDA of EGP20.5bn (including both 100% of VODE and ETEL’s operations). This confirms our view that ETEL, regardless of the conclusion of a deal, is undervalued.