Published On: Sat, Dec 21st, 2013

PTCL acquires Warid Telecom and its implications

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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