Kuwait’s Zain signs term sheet for Saudi stake sale
Inks agreement to sell stake in affiliate; Batelco, Kingdom had made joint offer for the stake
April 7, 2011 2:55 by Reuters
Kuwaiti telco Zain has signed a term sheet agreement to sell its quarter-stake in Zain Saudi, it said in a statement on Thursday, paving the way for a due diligence process on the $950 million deal.
The firm said the agreement was signed with Saudi investment firm Kingdom Holding and Bahrain’s Batelco, on the terms previously set by Zain.
Kingdom and Batelco made a joint offer for the stake last month.
“Zain signed yesterday the term sheet for the non-binding offer, with Kingdom-Batelco consortium…to buy Zain’s 25 percent stake in Zain Saudi,” the firm said in a statement on the Kuwaiti bourse website on Thursday.
Zain’s shares had been suspended pending the statement, and opened 1 percent lower at 0852 GMT when trading resumed.
Offloading the 25-percent holding in Zain Saudi was the pre-requirement of a $12 billion takeover of parent Zain by the UAE’s Etisalat. The deal fell through last month after Etisalat walked away.
Yet Zain is still pursuing the Zain Saudi stake sale, despite Etisalat withdrawing its offer last month, citing Zain’s divided board and regional unrest. (Reporting by Eman Goma; Editing by Dinesh Nair)