Saudi Telecom (STC) has increased its shareholding in Viva Kuwait from 26% to 51.8%, despite its US$3.30 per share offer not being recommended by the target’s management board.
Saudi Telecom (STC) (TASI:7010) has increased its shareholding in Viva Kuwait (KW:822) from 26% to 51.8%, the buyer announced in a filing with the Tadawul stock exchange. The offer period for the listed shares ran from 27 December 2015 until 31 January 2016.
“Regarding STC’s voluntary offer to acquire the shares of Viva it does not currently own, STC wishes to announce that the offer period has closed on 31 January and that STC will be acquiring 128,860,518 shares of Viva representing 25.8% of the total shares in issue for a total consideration of KD 128,860,518 (SR 1,590,138,792, or US$424m) at a price of KD 1 per share (SR 12.34, or US$3.30, per share),” the Saudi incumbent said in the statement.
In mid-December, STC made the US$3.30 per share offer, which the management of Viva Kuwait did not recommend.
In early January, STC CEO Khaled Al Bayari said his company would not raise its offer price because it was “based on extensive study of Viva’s future business plan, as well as the growth opportunities in the Kuwaiti telecom market and investments needed by Viva to compete in the market”. Furthermore, STC said “since Viva’s establishment, STC has offered all the technical, financial and strategic support that has enabled Viva to grow in a very competitive market.”
Viva competes with Zain and Ooredoo’s local subsidiaries. STC acquired Kuwait’s third mobile licence in 2007, paying US$980m. It listed on the local exchange in December 2014, nearly six years after completing a US$93.6m IPO.
NBK Capital is reportedly advising STC, while Protiviti is advising Viva.
Viva is owned by STC (26%) and Kuwaiti government entities (24%), while the remainder is in free float.
STC said it would now seek approval from the relevant authorities in Kuwait.