Wind and Vodafone team up to squeeze EIT out of Forthnet

Local mobile networks Vodafone and Wind Hellas have forged a common front against Emirates International Telecommunications (EIT), the biggest shareholder at Greece’s main alternative fixed-line service operator Forthnet. Instead of battling each other for control of the operator, they are now joining forces to get full control of the company, which also owns pay TV platform Nova.

To this end, Wind Hellas, owner of a 33 percent stake in Forthnet, has agreed to transfer 13.25 percent of shares to Vodafone. Vodafone Greece, according to a statement released on Tuesday, has therefore obtained a call option to acquire 14.58 million Forthnet shares belonging to Wind, which it can exercise by June 4, 2015. No price has been announced for the transaction.

The completion of the transfer will not be delayed, taking Vodafone’s stake in Forthnet – the leading triple-play provider in Greece – from 6.5 to 19.75 percent, on a par with Wind Hellas’s from its current 33 percent. With their combined stake at just under 40 percent, they will then try to put pressure on EIT to sell its 44 percent stake at a normal price.

The two local firms have tried to achieve that goal separately in recent months, but to no avail. Wind may have the leading role as it owns 33 percent of Forthnet, but it is short of cash, while Vodafone is more financially robust.

The Arabs tried to play the one off against the other in a bid to raise the price they would get for their stake, so as to reduce their losses from this investment.

If EIT refuses to sell its stake, then Wind and Vodafone will try to compact a front with Forthnet’s minor stakeholders to take full control of the company and squeeze the Arabs out. The clock is ticking, as...