Bahraini incumbent Batelco has made a formal offer for a 25% stake in Saudi Arabia’s number three operator, Zain KSA.
Batelco Group CEO Peter Kaliaropoulos was cited stating that the offer would be valid until 16 February, but declined to name the…
Bahraini incumbent Batelco has made a formal offer for a 25% stake in Saudi Arabia’s number three operator, Zain KSA.
Batelco Group CEO Peter Kaliaropoulos was cited stating that the offer would be valid until 16 February, but declined to name the price.
Batelco, which is rumoured to be advised by Citi, was the first operator to voice an interest in Zain KSA, when it emerged that the unit would have to be sold as a condition for UAE incumbent Etisalat’s acquisition of a 46% stake in parent company Zain Group.
TelecomFinance understands that Batelco may have previously made an offer for the business, but that its offer came in too low.
While Batelco and other strategic suitors – which could include Qtel, MTN and France Telecom – would be expected to offer a higher price, potentially in a competitive auction, it is possible that their influence might be less welcomed by current management, sources say.
In the meantime, Saudi-based investment group Kingdom Holding, which is advised by RBS, has emerged as another bidder, giving Zain KSA until 6 February – and then 13 February – to accept it.
The view in the region is that Kingdom, which is 95% owned by one of King Abdullah’s nephews, Prince Alwaleed, will offer a lower price but enable an easier and faster transaction that could see fewer regulatory hurdles.
It remains unclear whether Saad al Barrak, who resigned as CEO of Zain Group a year ago to head up Zain KSA, is linked to Kingdom’s bid.
Ongoing rumours – reported by TelecomFinance back in November – that he is looking at options for a potential R2.75bn (US$733bn) buyout of the group continue, despite his denying that he has approached banks and sponsors about gaining financial support for such a move.
As for Zain KSA itself, it is unclear how much of a process really is in place. It is thought that a sale will only take place once Etisalat completes its due diligence on Zain. Its ability to do this is further complicated by shareholder and board member disagreements within Zain.
UBS, Credit Agricole, or a combination of both is advising Zain on its dealings with Etisalat, and assuming these go through, will be acting on behalf of Zain KSA.
