UAE telecom giant Etisalat said on Wednesday that it has offered to buy a stake in Kuwait's leading mobile operator Zain, in a deal potentially worth 10.5 billion dollars, according to Dubai media. "Etisalat has submitted a preliminary conditional offer to buy a stake in Zain," Etisalat's vice president of corporate communications Ahmed bin Ali said in a statement.
"Concluding this offer depends on the fulfilment of certain requirements and conditions necessary to finalise the deal," Ali said, without providing further details. The Dubai-based TV business channel CNBC Arabiya reported earlier on Wednesday that Etisalat offered to buy a 46 percent stake in Zain for an estimated 10.5 billion dollars.
Quoting unnamed sources, it said Etisalat has offered a price of 1.7 dinars (5.97 dollars) per share. Zain share prices immediately jumped on the news, gaining 7.9 percent to close at 1.36 dinars (4.77 dollars). The Kuwait Stock Exchange index also closed up 0.85 percent at 6,928 points. Zain posted a statement on the KSE website saying its management had not received any offer as has been reported.
Etisalat is thought to have been in talks with leading shareholders in Zain such as the Khorafi group and not with the management. The 46 percent is a controlling stake in Zain since 10 percent of its equity are in treasury shares which do not have a voting power.
In March this year, Zain sold its operations in 15 African nations to India's Bharti Airtel for 10.7 billion dollars, netting a profit of more than three billion dollars from the deal. Besides Kuwait, Zain operates in Saudi Arabia, Bahrain, Jordan, Iraq, Lebanon, Sudan and Morocco.
The Kuwaiti government holds a 24.6 percent stake in the firm, which currently has more than 30 million clients. Before striking the deal with Bharti, Zain held unsuccessful negotiations with an Indo-Malaysian consortium to sell 46 percent of the company for about 14 billion dollars.