Zain Saudi sees due diligence by Aug end
Riyadh, June 15, 2011
Kuwaiti telco Zain said it expects due diligence on its planned $950 million sale of a 25 per cent stake in its Saudi affiliate to be completed by the end of August. The transaction is expected to be finalised in the third quarter of this year.
The Zain announcement came on Wednesday after a consortium of Bahrain telecom giant Batelco and Saudi billionaire Prince Alwaleed's Kingdom Holding was granted access to Zain Saudi's records.
The Zain Saudi board at a crucial meeting held earlier today, approved a non binding term sheet with the Batelco-Kingdom consortium, which paves the way for due diligence to be completed for the sale of 25 per cent stake in Zain Saudi.
The joint bidders welcomed the Zain move describing it as 'major milestone towards a successful closure.' Zain shares gained 1.9 per cent at 0710 GMT on the Kuwait bourse after the announcement.
The trio had signed the terms sheet for the deal in April, but the delay in starting due diligence had raised questions whether it would go forward.
The uncertainty on the stake sale has weighed on Zain Saudi's shares, which slumped to a five-week low on Saturday.
Welcoming the decision, Ahmed Halawani, Kingdom's executive director and board member, said, “We just cleared a major milestone towards a successful closure. All parties negotiated in a very consultative and professional manner to ensure value is created for Zain Saudi and their respective shareholders.'
'We will continue to work as one team to conclude the due diligence stage smoothly and successfully and ensure that Zain Saudi rapidly and profitably builds market share,' he added.
Batelco Group CEO, Peter Kaliaropoulos, said, 'We were always confident that the consortium would satisfactorily address all matters raised by Zain Saudi.'
'This is a complex transaction involving four different companies. Understandably all issues relating to the due diligence exercise and the scope and commercial terms of the management agreement required careful consideration and negotiation by all parties.'
'We are all pleased with the agreement reached and remain focused on accelerating Zain’s growth and value to its customers in Saudi,' he added.-Reuters and TradeArabia News Service