Dubai : Emirates Telecommunications Corporation (etisalat) said yesterday that no final agreement has been made yet in regard to its offer to buy a 46 per cent stake in Kuwait's Mobile Telecommunications, or Zain, a deal valued at about $11.7 billion (Dh 42.97 billion).
The stake buy would be one of the biggest recent corporate deals in the Mid-east, rivalling the $11.6 billion purchase in 2007 of General Electric's plastics unit to Saudi Arabia's Saudi Basic Industries Corp.
On Wednesday, etisalat said it had made a preliminary offer to buy a stake in Zain.
Statement
"Etisalat has submitted a preliminary conditional offer to buy a 46 per cent stake of Zain for an amount of 1.70 Kuwaiti dinars per share ($5.97)," said Ahmad Bin Ali, etisalat's senior vice-president of corporate communications in an emailed statement yesterday.
"We would like to emphasise that no final agreement has been reached at this point in time as this offer depends on the fulfilment of specific requirements and conditions that must be met to finalise the deal," he added.
Zain shares were suspended on the Kuwaiti bourse. They closed up 7.9 per cent at 1.36 dinars on Wednesday.
Traders also said etisalat shares were suspended from trading yesterday pending further news on the possible Zain stake buy. A spokesman at the Abu Dhabi Exchange wasn't immediately available for comment.
Zain's ownership includes the government of Kuwait and a large merchant clan in Kuwait. Mohammad Abdulmoh-sin Al Kharafi and Sons Co. holds a 12.4 per cent stake in Zain, according to Zawya.com. Bankers said they expected a response from Zain as early as yesterday. National Bank of Kuwait is lead managing the deal, while BNP Paribas is advising the Al Kharafis on the sale, another banker said. Both banks declined to comment.
A deal would give etisalat access to strategic markets in the Middle East North Africa region, including Iraq — a major market etisalat has focused on but until now failed to get a foothold in — Kuwait, Bahrain, Morocco and Jordan. The stake buy would also allow for potential consolidation opportunities in Saudi Arabia and Sudan where etisalat already operates Etihad Etisalat, or Mobily in Saudi Arabia, and Canar in Sudan.
Stakeholder
Kharafi to accept offer
Kharafi Group, a major shareholder in Zain, will accept an offer for its stake in the Kuwaiti telco from the UAE's etisalat, a source familiar with the matter said yesterday.
Earlier, Nasser Al Kharafi, the head of Kharafi group, told a Kuwaiti newspaper the offer was "suitable and good for both parties".
Etisalat, formally Emirates Telecommunications Corp., confirmed yesterday that it has bid 1.7 dinars a share for a 46 per cent stake in the Gulf Arab region's third-largest telecoms firm, valuing the stake at nearly $12 billion.
Shares in etisalat, majority owned by the government of the United Arab Emirates, fell 0.5 per cent when trading resumed after a halt. Zain shares were halted by the bourse, pending details of the deal.
— Reuters
