The board of Viva Kuwait has recommended that its shareholders not vote in favour of Saudi Telecom’s recent KD1 per share takeover offer.
The management board of Viva Kuwait (KW:822) has recommended that its shareholders not vote in favour of Saudi Telecom’s (TASI:7010) takeover offer.
In a statement, the board described the KD1 (US$3.30) offer for the 74% of the company it does not already own as “not fair” but acknowledged that shareholders were free to make their own decisions.
The cash offer values the shares at 9% less than the number three player’s closing price on the last day of trading before the bid became public, when it had a market cap of US$1.8bn.
In a stock market filing, STC responded that the valuation – prepared by adviser Protiviti – was “conducted based on Viva’s business plan…and…projected cash flows,” adding that it did “not intend to change the offer price.”
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 last December, 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 entitities (24%), while the remainder is freely floated.
STC has also been named as a potential suitor for Umniah, the Jordanian subsidiary of Batelco. The Saudi incumbent also owns 35% of Oger Telecom, the subsidiaries of which include Turk Telekom and South Africa’s Cell C, and 100% of Viva Bahrain.
In 2014, STC sold its Indonesian mobile business Axis to local rival Axiata XL.
Earlier this year, the company appointed Khaled Biyari as its new CEO, and Abdullah Bin Hasan Alabdulqader as its new chairman.