The Botswana Public Officers Pension Fund (BPOPF) armed with assets of more than P60 billion, is finalising an offer to MTN for an equity stake that would give it control of Mascom.
BPOPF is engaged in a tussle with Zimbabwean billionaire Strive Masiyiwa who earlier this year announced a P3 billion offer to buy MTN’s 53% stake in Mascom. The deal would increase his company, Econet’s overall hold in the local telecomms giant to 60%.
While a buoyant Masiyiwa told a packed youth meeting in Gaborone in April that the deal was a fait accompli, Econet ran into trouble after BPOPF resisted the transaction citing the right of first refusal principle. The pension fund is not only wary of the billionaire’s plans for Mascom but believes control of the country’s largest mobile telecomms provider should remain with Batswana who have built up its value over the last 21 years.
Mmegi recently reported that the Non-Bank Financial Institutions Regulatory Authority had given the pension fund its blessings to increase its stake in Mascom from 40% to 60%.
This week, highly placed insiders alleged that Econet had engaged a New York-based firm, Hill+Knowlton Strategies to launch a campaign of persuasion targeting regulators, authorities and ordinary members of the public, in order to prise BPOPF’s hands off the MTN stake.
Code-named Operation Nehemiah the global PR firm reportedly plans to leverage on the “goodwill expressed by the public and President Mokgweetsi Masisi towards Econet when the deal was initially announced”.
Masisi, who enjoys a close relationship with Masiyiwa, co-hosted the April youth meeting but stopped short of endorsing the P3 billion transaction. He has since said the matter is not for his office or politicians to intervene in.
Hill+Knowlton is not a stranger to Botswana, being famous for running a P20 million lobbying campaign around 2001 on behalf of government and Debswana to fight off the ‘blood diamonds’ attacks run by Survival International and other international NGOs.
Hill+Knowlton took its lobbying to the US and Europe, gaining support for the ‘Diamonds for Development’ narrative that eventually stifled the ‘blood diamonds’ campaign.
The Project Nehemiah suggests Econet could be looking at lobbying for its favoured outcome in the tussle with BPOPF.
“Econet is in the process of buying 53% of Mascom shares from MTN, a move which enjoys the support of both the Botswana public and President Masisi,” reads a brief on the alleged Project.
“However, one of the shareholders, the BPOPF, is stalling the transaction’s progress behind the scenes by being uncooperative and yet publicly wanting to appear the main party driving the listing of Mascom locally.”
Both Masiyiwa and Mascom have said they would offer shares
Yesterday, however, Hill+Knowlton’s CEO for Africa, Roz Thomas, said the firm had not been engaged for work in Botswana, in an emailed response to questions.
A local PR agency, which previously partnered with Hill+Knowlton also expressed ignorance of any campaign or any knowledge that Econet had indeed engaged the New York-based firm.
Econet officials could not be reached for comment.
Hill+Knowlton, one of the world’s leading PR and strategy firms, says it works with 50% of the Fortune Global 500 companies and boasts 85 offices in more than 45 countries.
The firm’s global team includes former journalists, public policy advisors as well as behavioural and data scientists.
One of the firm’s specialities is government and the public sector where Hill+Knowlton states that it has experts worldwide who “know the players, the power centres and the right messages to convey to the right audiences”.
Meanwhile, the BPOPF expects to present MTN with its rival offer very soon. The pension fund is understood to have recently identified a loophole allowing it to pursue a ‘forced sale’ of MTN shares.
Lawyers retained by the pension fund reportedly advised that while the BPOPF did not have pre-emptive rights to block the Econet/MTN deal, it did have the right to pursue a forced sale of the shares MTN holds in Deci.
Deci is an investment vehicle which holds 60% of Mascom. BPOPF holds 67% of Deci and MTN the balance, with their relationship governed by a shareholders agreement.
MTN invested in Deci through Mobile Botswana Limited and the shareholders agreement allegedly states that if there is a change of ownership or control, the other shareholder, being BPOPF can initiate a forced sale.
“Technically, MTN can decide not to sell to Econet, which would prevent the BPOPF from upping its stake,” insiders tracking the matter told Mmegi.
“The pension fund can only force MTN to sell to it, if MTN accepts Econet’s offer.
“BPOPF is finalising a valuation of the stake it wants to buy and will make the offer if MTN concedes that the ‘forced sale’ provision is valid.
“If not, the matter even including Econet will probably go for arbitration or the courts.”
Mmegi is informed that both MTN and BPOPF have retained top local legal firms in anticipation of a deadlock and a courtroom showdown.
Mascom is comfortably the country’s largest mobile company, holding about 53% of the local mobile phone market’s estimated 3.18 million subscriptions in 2018.