Zain rejects offers for KSA stake
Etisalat remains optimistic about acquiring Zain Group despite its failure to dispose of Zain KSA.
Zain Group said that it had rejected all three offers it had received to buy its 25% holding in Zain Saudi Arabia, in a move that casts further doubt on the chances of the UAE's Etisalat being able to acquire the Kuwaiti telco.
Zain had received bids from Batelco Group, Kingdom Holding, and an investment consortium led by Al Riyadh Group. "Zain Group’s board of directors unanimously rejected all the bids to buy the 25% stake in Zain Saudi Arabia,” the company said in a statement.
Zain’s decision to reject all three offers is likely to put further strain on Etisalat’s planned acquisition of Zain, as the deal is dependent on Zain Group selling its Saudi Arabian assets for regulatory reasons.
Etisalat said it “regretted” Zain's rejection of all bids for a 25% stake in Zain Saudi, a key regulatory requirement for the Etisalat deal to go through.
However, Etisalat said it was comfortable with the pace of its due diligence on Zain Group and was optimistic that the deal would reach completion.
"We are comfortable with the progress of the due diligence which aimed to be completed by end of February 2011," Ahmed bin Ali, a spokesman for Etisalat, said in a statement.
"The due diligence process is still undergoing and, after this stage the results and the outcomes [...] will be discussed with the sellers before presenting it to Etisalat board of directors."
Peter Kaliaropoulos, CEO, Batelco Group, said that the Batelco consortium had presented a “very fair and reasonable offer” to Zain Group.
“Our offer also involved a significant amount of new cash to be injected into Zain KSA as working capital to accelerate its growth in a highly competitive market. Ensuring that both Zain Group and Zain KSA appropriately benefit was at the core of our offer,” he said. “Negotiations were amicable but we did not reach a suitable deal.”
In other news, it emerged that Zain Group plans to cut its workforce by 40% in Kuwait and Bahrain to reduce costs, according to a report from Dow Jones. The jobs cuts were to include up to four senior executives, Nabil Bin Salama told the newswire.