UAE's Etisalat to continue talks with Zain shareholders on its $12bn offer for control of Kuwaiti teleco
biggest phone operator, will look to expand in emerging markets if a planned
deal to sell a 46 percent stake to Emirates Telecommunications Corp falls
through, chief operating officer Barrak Al Sabeeh said.
“As of now, because
of the non-clarity of the Etisalat deal, we should just keep our focus on what
we have,” Al Sabeeh said in an interview on Monday at Zain’s headquarters in
Kuwait. “Once things are clear, definitely we will look into good opportunities
known as Etisalat, will continue talks with Zain shareholders on its $12bn
offer for control of Zain after it missed a deadline because of “unforeseeable
delays” to complete the diligence process, the Abu-Dhabi based company said
Etisalat, the UAE’s
biggest phone carrier, is aiming to expand its presence in the Middle East,
where Zain operates in countries from Kuwait and Iraq to Bahrain. Zain sold
most of its African assets last year to Indian billionaire Sunil Mittal’s
Bharti Airtel Ltd. for $9bn.
“The way going
forward is to expand,” Al Sabeeh said. “Most of the operations we have are
saturated. So you should look into emerging markets or new licenses in some of
the tempting markets, such as the Far East, Indian subcontinent, East Europe,
Zain, as Mobile
Telecommunications Co is known, would rather acquire an existing operator than
“a green-field license,” Al Sabeeh said.
Zain now operates in
seven countries. Its net income rose fivefold to KD976m ($3.5bn) in the first
nine months of last year as it added customers and after a KD770.3m capital
gain from selling most of its African assets to Bharti.
“The challenge for
this year and next is huge, especially in the saturated markets of Bahrain,
Kuwait and Jordan,” Al Sabeeh said. “Sudan and Iraq are the two areas where we
are expecting growth because penetration hasn’t reached 100 percent. And we
expect to have better results in 2011 than 2010 in terms of net profit.”
The bid by Etisalat
to buy about 46 percent of Zain expired January 15. No new deadline has been
set, one person familiar with the talks said January 16, declining to be named
as the negotiations are private.
commitments from Zain investors holding about 40 percent of the company, three
people involved in the talks said January 14, declining to be identified
because the talks are confidential.
its offer on September 30. Excluding treasury stock, the holding would amount
to 51 percent of share capital and voting rights, according to a preliminary
agreement that Etisalat reached in November with Al Khair National for Real
Estate and Stocks Co, Zain’s second-biggest shareholder leading the stake sale.
“We are managing our
operations, business as usual, regardless of the sale,” al-Sabeeh said. “If it
happens, they take a clean-cut operation. If it doesn’t, at least we did not
tamper with our business.”