Published On: Sat, Dec 21st, 2013

PTCL acquires Warid Telecom and its implications

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Corporate News (Pakistan News) PTCL

Corporate News (Pakistan news)

According to the notification issued to the KSE, the Board of Directors (BoD)of PTCL (Pakistan Telecommunication Company Limited) has made a binding offer to the principal shareholder of Warid Telecom for its 100% acquisition.

-Though, the transaction size is still to be determine but news reports has suggested that deal size could range between US$500mn to US$1bn.

-Though the deal would make PTCL’s the second largest players in the telecom industry, but highlight implication on PTCL dividend can cause short term weakness in the stock price.

-On the other hand, the deal bodes well for BAFL (Bank Alfalah) that holds 8.24% shares of Warid Telecom. Our back of the envelope calculation suggest one time earnings impact of PkR0.15-2/share on BAFL.

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