The Bahraini operator Batelco has had its offer to buy a 25% in Zain’s Saudi operations rejected by the Kuwaiti firm. This development is yet another setback for Etisalat’s bid to purchase a controlling stake in Zain, as Zain KSA (the Saudi branch) must be sold if the UAE operator is to make the acquisition. This criterion is required as Etisalat is already present in Saudi Arabia via its Mobily operations.
It was confirmed that the deadline for an agreement had lapsed in a statement from Batelco, with CEO Peter Kaliaropoulos commenting: “We believe the Batelco Consortium 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.”
However, other reports have suggested Zain rejected the offer as it didn’t meet the market value for the assets. Etisalat is attempting to agree a deal for around US$12 billion, and purports to be making “good progress” although the initial deadline for an agreement was January 15th.
Meanwhile, Zain has faced problems from its shareholders, with a vocal consortium of minority shareholders actively opposing the deal. The Kharafi family – Zain’s most prominent shareholders – are pushing for the deal, but their efforts are also being jeopardised by a rival bid made by Turkish conglomerate Çukurova, which is working with one of the Etisalat deal’s most prominent objectors, the 4.5% Zain shareholder Al-Fawares Holding.