* Kingdom of Morocco has big say in choice of buyer
* Final bids for 53 pct stake in Maroc Tel due late April
* Ooredoo, Etisalat, and KT Corp working on bids
* Sale is key for Vivendi, a year into strategy revamp
By Leila Abboud and Sophie Sassard
PARIS/LONDON, April 8 Manoeuvring in Vivendi's
auction of its Moroccan telecoms business is
intensifying as three suitors lobby the kingdom's government
ahead of a bidding deadline at the end of April.
Since Maroc Telecom is 30 percent owned by the
state, the kingdom has the final say in Vivendi's eventual
choice of buyer for a 53 percent stake worth around $6 billion.
As a result, regional politics, culture and even language will
influence the outcome.
A deal is crucial for Vivendi, whose management is due to
face shareholders at an April 30 meeting with little to show for
a year of efforts to reduce exposure to telecoms, focus more on
media and cut debt.
The French group has already failed in attempts to sell
video game unit Activision Blizzard and Brazil telecom
GVT. Pulling off a Maroc Telecom sale will decide the next move
in its strategic overhaul.
Ooredoo, formerly named Qtel and backed by Qatar's
oil and gas wealth, has deployed lobbyists in Morocco with
pledges to pour money into unrelated infrastructure projects to
benefit the kingdom, said two people familiar with the process.
The pitch could appeal to the north African kingdom, whose
economy has struggled lately because of reliance on trade with
the euro zone and flagging tourism.
Morocco, ruled by the Arab world's longest-serving dynasty,
lacks the oil riches of the younger Gulf monarchies.
Etisalat is appealing to Morocco's sense of
prestige with a promise to make Maroc Telecom the flagship of
its African operations and deploy Maroc Telecom executives
throughout the continent, said the two people.
The group owned by the United Arab Emirates would fold its
underperforming West Africa business, known as Atlantique, into
Maroc Telecom and use that as its leading brand in the region.
Korea's KT Corp., on its first major foray
overseas, is working on sharing up to 40 percent of the Maroc
Telecom stake with local partners to help it navigate the
country, mitigate risk and finance the bid, three sources said.
It was not immediately clear if Ooredoo or Etisalat were
also in talks with local partners, although the people familiar
with the bidding process said such a scenario was possible.
"The Moroccans will be part of the deal one way or another,"
said one of the people.
The second person said the eventual winner would have to
strike a balance between Vivendi's priorities and Morocco's
ambitions for one of its largest companies that controls
strategically important communications infrastructure.
"Vivendi is only interested in getting the highest price,
while Morocco wants a party that will invest in the long term to
develop Maroc Telecom, create jobs and act in a way that
generally benefits the country," said the person.
A source from Morocco's finance ministry downplayed the
importance of political considerations on the deal. "Obviously
we have our word to say because we want someone whom will invest
more and more in infrastructure," the ministry source said.
"This is the only requirement."
NECK AND NECK
People involved in the sale say Etisalat and Qtel are
running neck and neck in the auction and both have the financial
firepower to back their bids.
Etisalat has lined up an $8 billion dual-tranche loan
facility to finance its bid, bankers working on the deal said.
Qtel is also in the advanced stages of negotiating a financing
package with banks.
Although they lack the deep pockets of the other bidders,
the Koreans plan to bring in locals for contacts and know-how
could work in their favour, said one person. Three other sources
said the cultural gap between the Koreans and the Moroccans was
significant and had hampered KT's bid in recent months.
A KT Corp spokeswoman said it was still reviewing whether to
submit a final bid and declined to comment on partners.
Maroc Telecom offers fixed-line, mobile and Internet
services in the kingdom and is one of Africa's top telecom
firms, with units in Burkina Faso, Gabon, Mali and Mauritania.
The buyer will inherit a firm that has been a reliable cash
machine for Vivendi but has seen slower growth in recent years,
analysts say, although there is growth potential in sub-Saharan
Africa, where sales and profits rose last year.
Group sales in 2012 fell 1.8 percent to 2.7 billion euros,
while EBITA fell 9.4 percent to 987 million euros.
Vivendi will emphasize progress on the Maroc Telecom sale at
the April 30 shareholder meeting, said the second person. "It
will either announce exclusive talks with a bidder or boast
about the very serious and strong offers they've received."
A Vivendi spokesman said of the sale: "The process is moving
along and we are confident of a positive outcome."
Progress on the sale has been slowed by the political tinge
to the proceedings, said the sources. Important factors, such as
pledges of deeper trade ties, may not be in the bid documents.
Morocco's relationship with Qatar was strained during the
Arab Spring uprisings by state-owned news channel Al Jazeera's
coverage of the political unrest and, more recently, by a
perception that Qatar has aided the rise of the Muslim
Brotherhood in Egypt and elsewhere in the region.
"The Moroccan palace has political and security concerns
about the rise of the Muslim Brotherhood in the region, which
are shared by the Emiratis, so in that respect the two are
aligned," said Neil Partrick, a Middle East analyst affiliated
with LSE's Kuwait Gulf Programme.
But the kingdom has come increasingly to rely on the
wealthier Gulf states for trade and aid, so will not want to
alienate Qatar or the United Arab Emirates.
Morocco's King Mohammed went on a tour of Gulf Arab states
last October to drum up economic support for a $90-billion
economy heavily exposed to the debt-scarred euro zone through
trade, tourism and migrant remittances.
Along with Saudi Arabia, UAE and Kuwait, Qatar pledged to
invest $2.5 billion in the kingdom's tourism sector, with
payments expected early this year.
"The Qataris have been extremely aggressive, not just on the
telco side but overall with their investment strategy (in the
region), compared with Abu Dhabi, which has taken a cautious
stance," one senior telecoms banker.
"If you are the Moroccan government seeking to raise funds
to boost the economy, you may prefer to align with the Qataris
now. The money is clearly there."
The state will decide later whether to retain all of its 30
percent stake, one person familiar with the process said, and
may tender 5-10 percent of its shares if the deal is attractive.