Leading UAE operator Etisalat has announced it is aiming to buy 51% of its Kuwaiti rival Zain, rather than the 46% it had originally sought. It has also stated that one of the conditions to the deal is the sale of Zain’s Saudi Arabian business, and…
Leading UAE operator Etisalat has announced it is aiming to buy 51% of its Kuwaiti rival Zain, rather than the 46% it had originally sought. It has also stated that one of the conditions to the deal is the sale of Zain’s Saudi Arabian business, and warned that its offer will be withdrawn unless the parties have entered into “definitive transaction documents by January 15, 2011.”
According to the updated statement, which was published in English on the Abu Dhabi exchange today: “Etisalat’s board of directors has agreed to submit a conditional offer through Al Khair National Company for Stock and Real Estate, valued at KWD1.7 per share to purchase 51% of Zain’s total issued share capital.” This values the deal at up to US$11.8bn.
Al Khair subsequently issued a statement saying it had accepted Etisalat’s offer.
A spokesperson from Zain clarified the statement by saying: “It’s not 51% …it’s 46% plus the share of the treasury shares …given there is 10% treasury shares out there, they get 5%.”
Yesterday, Etisalat informed the Kuwaiti stock exchange that it was undertaking a formal due diligence process through one of Zain’s biggest shareholders, the al-Khair National Company for Stock and Real Estate. Al-Khair is a client of National Investment Company, which is in turn controlled by Kuwait’s richest family, the al-Kharafis, who effectively own about 20% of Zain.
Now, Etisalat must convince Zain’s minority shareholders to sell their stakes. The ownership of the remainder of the company is broken down as follows: sovereign wealth fund Kuwait Investment Authority (25%), treasury shares (10%) and free float (14%).
Etisalat was not available for comment by the time of going to press.
