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Mon 14 Mar 2011 03:13 PM

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Kingdom, Batelco offers $950m for Zain Saudi stake

Due diligence for offer to take six weeks; offer does not include $3.8bn of Zain Saudi debt

Kingdom, Batelco offers $950m for Zain Saudi stake
ZAIN DEAL: Zain must sell the stake in Zain Saudi to avoid overlap with Etisalat which also operates in the kingdom through affiliate Mobily (Getty Images)

Kingdom Holding Co and Bahrain Telecom (Batelco) offered SR3.56bn ($949.3m) for Kuwait Zain's Saudi assets, the Saudi investment firm said on Monday.

The offer does not include $3.8bn of Zain Saudi's outstanding liabilities, Kingdom, owned by Saudi billionaire Prince Alwaleed Bin Talal, said in a statement to the Saudi bourse.

"The coalition offer doesn't include bearing any liabilities of Saudi Zain," the statement said.

The monetary value of the offer will be subject to a due diligence process, which will take six weeks to complete, according to the statement.

The board of Zain had approved an offer from Kingdom and Batelco to take a 25 percent stake in the company on Sunday. Sources told Reuters that the offer was for a total of $5bn, including $3.8bn of Zain Saudi's debt.

The acceptance of the fresh offer from Kingdom and Batelco raises the chances of Abu Dhabi's Etisalat completing a separate $12bn deal to buy a controlling stake in Zain.

Zain's Saudi unit must be sold before that deal can go ahead. Zain's board approved the offer with a 5-to-2 vote, one source familiar with the matter, who declined to be identified, said.

Kingdom and Batelco, whose bids to buy Zain's Saudi operations were rejected last month, had teamed up on Sunday to make the joint bid for the assets.

Zain must sell the stake in Zain Saudi to avoid overlap with Etisalat which also operates in the kingdom through affiliate Mobily.

 

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