QTel has emerged as a possible buyer for Zain Saudi Arabia – which could open the door for its UAE rival, Etisalat, to buy 46% of Kuwait-based Zain.
However, QTel might not be the only suitor for Zain Saudi Arabia, with Jordanian newspaper Al-Rai…
QTel has emerged as a possible buyer for Zain Saudi Arabia – which could open the door for its UAE rival, Etisalat, to buy 46% of Kuwait-based Zain.
However, QTel might not be the only suitor for Zain Saudi Arabia, with Jordanian newspaper Al-Rai reporting that South African mobile operator MTN could also enter the fray – despite recent comments by MTN that acquisitions were now off the menu following a spate of failed deals.
But it is also possible that Mobily will be the asset coming up for sale, following suggestions to TelecomFinance that Etisalat is open to selling its Saudi asset.
After flatly denying any interest on Arabian TV station Al Arabiya, QTel told TelecomFinance: “In response to potential recent opportunities reported in the region, QTel has a stated strategy of looking at opportunities in three strategic regions that fall within its core lines of business. This can involve the analysis of several potential targets at any point in time. As a matter of policy we are not in a position to comment on any rumours currently in the market or press.”
Since Etisalat’s confirmed KD1.70 (E2.57) a share offer last week, attention has centred around what the combined group would do to reduce its Saudi Arabian holdings, which analysts at Bahraini bank Sico estimate comprises 55% of the local mobile market, thereby breaching Saudi FDI limits.
Sico suggested that QTel was lining-up buy Zain Saudi Arabia as a likely solution to the problem. “Qatar Telecom could be a possible contender for taking over Zain’s Saudi operation considering its strategic ambitions to expand its operations in the region,” Sico said. The bank values Zain’s 25% stake in Zain Saudi Arabia at around US$925m (E675m) assuming a 25% premium for a controlling stake.
Zain Saudi Arabia paid US$6bn (E4.38bn) for a licence to operate in Saudi Arabia in 2007 and has built a customer base of 7 million in just two years. However, the business faces competition from two much larger rivals (Mobily and Saudi Telecom’s STC). The network recently announced plans to raise US$1.2bn (E0.9bn) through a rights issue to fund its network expansion.
