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Etisalat’s winning streak ends in Turkey

Etisalat ceased bidding for the stake when offers exceeded US$6.5 billion, with Saudi Oger’s winning bid amounting to US$6.55 billion.

Etisalat has failed in a bid to acquire a 55% stake in Turkish state telco Turk Telekom, with the award being made to Saudi Oger, in partnership with Telecom Italia. Etisalat ceased bidding for the stake when offers exceeded US$6.5 billion, with Saudi Oger’s winning bid amounting to US$6.55 billion.

“To protect the interest of our shareholders, we chose to stop bidding at US$ 6.5 billion,” commented Obaid Bin Mes'har, CEO Etisalat International. “Had we increased the price beyond that we would have gone beyond what we believe is feasible. As much as our expansion plans are ambitious, they also have to add value to our shareholders,” he added.

The price offered for the stake is some way beyond what some analysts had expected, with consensus opinion in the lead-up to the final auction stage estimating that between US$3.6 billion and US$4.5 billion would be paid for the stake. Turk Telekom is the country’s only fixed line operator and has a 40% stake in GSM operator Avea.

Telecom Italia’s participation in the winning bid consortium as a minority shareholder means that it will not have to sell its own 40% stake in Avea as it had promised to if an opposing bidder won the stake in Turk Telekom.

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