Qtel Picks JP Morgan To Direct Maroc Telecom Bid

Gulf telecom operator Qtel has hired J.P. Morgan Chase to advise it on a potential bid for Vivendi’s Maroc Telecom, said four people familiar with the matter.

Vivendi aims to garner at least 5.5 billion euros ($7.14 billion) for its 53 per cent stake in Morocco’s biggest fixed and mobile operator, and has received initial expressions of interest from four carriers, sources told Reuters in October.

The French conglomerate is exploring selling several assets as part of an ongoing strategy review intended to pay down debt, boost a flagging share price and reduce the group’s exposure to capital-intensive telecom businesses.

Spokesmen for J.P. Morgan, Qtel and Vivendi declined to comment.

Maroc Telecom, in which Vivendi first bought a stake in 2001, offers fixed-line, mobile and internet services in the kingdom, and is also one of Africa’s main telecom operators with units in Burkina Faso, Gabon, Mali and Mauritania.

Maroc Telecom, which is Vivendi’s second-biggest division, has seen its growth slow in recent years amid tough competition, prompting a recent round of staff reductions that led 800 employees to take redundancy packages by July.

Other bidders may emerge. France Telecom’s CEO, which already owns a minority stake in the kingdom’s second-biggest operator Meditel, has said Maroc Telecom would be a “strategically interesting” acquisition.

United Arab Emirates-based Etisalat, Saudi Telecom , and South Africa’s MTN have also had spoken to Vivendi’s advisers about Maroc Telecom, sources told Reuters in October.

The kingdom of Morocco, which owns a 30 percent stake, would need to approve any sale.

Qtel, majority owned by the Qatar government, has expanded into more than 16 countries in the past decade and spent nearly $4 billion this year to take majority ownership of its Iraqi unit Asiacell and Kuwaiti arm Wataniya in separate deals.

In addition to the J.P. Morgan mandate, Qtel mandated six banks for a possible benchmark-sized dollar-denominated bond, lead arrangers said on Sunday, a move banking sources say may be to finance a potential bid for Maroc Telecom.

“There is the potential bond issue and banks are also lining up to arrange a bridge financing agreement which may be used to finance the acquisition,” said one banking source aware of the matter.

The source added that Qtel should not have difficulty raising money to finance a bid. “It’s a top-tier Qatar name with the backing of the state and a proven ability to do large transactions.”

For J.P. Morgan, the mandate win is another signal the U.S. lender is making key inroads in the wealthy Gulf state which has traditionally relied heavily on Credit Suisse and Barclays to execute deals.

The bank is currently an adviser to Qatar National Bank , the Gulf state’s largest lender, in its bid for Societe Generale’s Egyptian arm, a deal seen raising at least $2 billion for the French lender.