Kuwait-based Zain has denied reports that it has received an “official” takeover offer from Etisalat for a 46% stake, according to Reuters citing a spokesman.
CNBC Arabiya reported today that UAE incumbent Etisalat had offered to buy 46% of Kuwait’s Zain…
Kuwait-based Zain has denied reports that it has received an “official” takeover offer from Etisalat for a 46% stake, according to Reuters citing a spokesman.
CNBC Arabiya reported today that UAE incumbent Etisalat had offered to buy 46% of Kuwait’s Zain for up to US$11.8bn. It also said that National Bank of Kuwait is advising Etisalat, while BNP Paribas is advising Zain’s majority shareholder, the Al Kharafi Group. The banks declined comment.
According to a subsequent report by Bloomberg, Zain’s leading shareholders [the Al-Kharafis] intend to accept a US$10.5bn offer, which includes Zain’s Saudi Arabian assets.
The sources cited by CNBC Arabiya said Etisalat had offered KD1.70 (US$5.97) a share, which is a 25% premium on Zain’s closing share price on September 28 of KD1.36 (US$4.77) a share.
Since Zain’s US$9bn sale of its African assets to Bharti Airtel earlier this year, speculation has been rife that the Al Kharafis were looking for a way to exit the remainder of their telecom investments. TelecomFinance reported Etisalat’s interest in buying a majority stake in Zain back in July. One source has suggested that the Al Kharafis rejected a previous offer from Etisalat, as they were holding out for margins more in line with the African asset sale.
The transaction might throw up problems in Saudi Arabia, where Etisalat’s Mobily and Zain Saudi Arabia both operate. Telecom regulations in the Kingdom do not allow one foreign entity to own more than 49% of a telco in Saudi Arabia, meaning Etisalat would have to sell down its total shareholding in Saudi Arabia or even be forced into a sale of Zain Saudi Arabia.
Neither Etisalat nor Zain responded to email or phone requests for comment at the time of going to press.
