LONDON, 2 March, 2007 – A team of lawyers from the London office of Morrison & Foerster has advised The African Lakes Corporation (“ALC”), one of the oldest trading companies in Africa, in relation to the disposal of subsidiary Africa Online Limited (“AFOL”) to Telkom SA Limited (“Telekom”).
The sale is the culmination of a complex and politically-charged hostile takeover, which raised several questions relating to the interpretation of the Takeover Code.
Initial interest in purchasing ALC, which was de-listed from the London Stock Exchange in 2003 and therefore still subject to the Takeover Code, came from the African Telecoms Company Limited (ATC), a Kenyan company. The takeover became hostile after ATC’s formal announcement to the London Stock Exchange of its intention to make a cash offer to acquire ALC was rejected by the board of ALC. ALC’s board resisted the offer in a formal announcement to shareholders stating that there was another potential bidder and it was possible that discussions with this bidder might lead to the announcement of an offer which would generate a better return to ALC shareholders.
The competing bidder was South Africa’s incumbent Telkom who made a proposal to the board of ALC relating only to the purchase of AFOL.
After the completion of the disposal on February 23, 2007, lawyers from Morrison & Foerster are continuing to advise ALC in relation to the company’s voluntary liquidation.
Partner Ed Lukins, who led the transaction for Morrison & Foerster commented, “The deal process lasted over 5 months with several interested parties making offers. In the end we were left with an offer for ALC and an offer to buy out the principal operating subsidiaries [AFOL]. The Company was also subject to a company voluntary arrangement and accordingly the creditors were a very interested party. Evaluating competing but disparate offers in a situation such as this is never an easy matter, particularly with the City Code providing an additional regulatory framework. Despite the deal looking as if it could have gone either way, shareholders would appear to have secured the best financial return by allowing the sale of AFOL to proceed.”