Chairman moves to reassure investors over Zain takeover
Etisalat has moved to reassure investors its bid to gain control of Zain will not hurt dividends and that it can secure the finance needed to push the deal through.
Etisalat has yet to do any due diligence on Zain after its offer to gain control of the Kuwaiti operator but expects the deal to be closed in a "number of weeks", said Mohammed Omran, the chairman of the telecommunications operator.
Last month, Etisalat offered to buy a 46 per cent stake in Zain for 1.7 dinars a share for a total of about US$10.5 billion (Dh38.56bn) in a deal that would make the UAE telecoms company one of the largest in the world.
Mr Omran said Etisalat was still working on the details of its acquisition of Zain.
His comments were the first official statement that Etisalat has issued since announcing its bid for Zain on the KuwaitStock Exchange. Mr Omran did not specify the terms and conditions Etisalat had required for the deal to go through.
"We believe that this deal represents great value to our shareholders," he said. "However, we intend to confirm this value through detailed due diligence. We will not proceed unless such valuation is confirmed."
Kuwait's Kharafi Group does not yet have the required 46 per cent needed to transfer Zain to Etisalat and is still trying to obtain enough shareholder approval.
Zain's shareholder interest in Etisalat's bid has been mostly positive, Mr Omran said.
"Most of the reaction in Kuwait has been very positive, however, as in any high-profile transaction there is some opposition from some shareholders," Mr Omran said.
He said Etisalat was "confident" it would be able to finance the bid for Zain. It is estimated Etisalat will have to raise about $9bn in debt to help finance its acquisition.
"We are confident that Etisalat can obtain the required funding in order to finance the transaction on favourable terms. We have received several attractive proposals from banks that would enable us to finance the transaction," Mr Omran said.
He said the deal would meet regulatory approvals and should not be affected by the overlapping operations of Etisalat and Zain in Saudi Arabia.
Etisalat already operates Mobily, the second-largest mobile phone company in Saudi Arabia.
Published: October 22, 2010 04:00 AM