Zain accepts Batelco-KHC offer
Deal values Zain KSA stake at $950 million. Consortium denies that it will take on $3.8 billion of Zain KSA's debt.
Zain Group has accepted a non-binding offer from Batelco and Kingdom Holding Company (KHC) to acquire its 25% stake in Zain Saudi Arabia, according to a statement from Batelco.
Bahraini operator Batelco said that its offer for Zain KSA, which it made jointly with Saudi Arabian investment firm KHC, was for $950 million in cash.
Batelco added that the offer was subject to the findings of a due diligence exercise and "other approvals" which could take "at least six weeks".
Batelco denied rumours that the offer included an agreement by the consortium to take on $3.8 billion of Zain KSA's debt.
"Shareholders of Zain Kuwait, Zain KSA, KHC and Batelco will be informed of any further material developments on a timely basis," the statement from Batelco said.
Zain's decision to accept the non-binding agreement is likely to come as welcome news for UAE telco Etisalat, which said last week that it remained committed to acquiring a 46% stake in Zain Group. Etisalat's proposed acquisition is dependent on Zain Group selling its Saudi Arabian assets for regulatory reasons.
Lindsey McDonald, a consultant with Frost & Sullivan's ICT practice for the MENA region, said that the KHC-Batelco bid would benefit Zain Saudi Arabia by allowing it to "further bed down" its operations and "leverage synergies" with its new partners.
"Batelco and Etisalat both bring a wealth of service and product knowledge that Zain could utilise - particularly in the provision of enterprise communications services," McDonald said.
Batelco and KHC announced just yesterday that they had made the combined bid for Zain Saudi Arabia. The two firms set Zain a deadline of today to respond to the offer.