Zain plays hard to get
Kipp is running out of things to say about this ongoing mess, so resorts to a questionable analogy. Meanwhile, some Zain board members resort to the exit.
February 20, 2011 3:01 by Samuel Potter
You’ve got to hand it to Zain. The Kuwaiti-based telecoms giant has made a real fight of it since the UAE’s former monopolizerer Etisalat came knocking with a bunch of flowers, a box of chocolates and a marriage proposal.
Etisalat likes the look of Zain – and who wouldn’t. As we explained in our questionably humourous article of last month, the company, formerly Mobile Telecommunications Company, or MTC, has a commercial presence in Bahrain, Iraq, Jordan, Kuwait, Lebanon, Morocco, Saudi Arabia and Sudan, and can boast no fewer than 5,000 employees and more than 35 million customers. Zain is traded on the Kuwait Stock Exchange, and 100 percent of its shares are traded. Results for the first half of last year had revenues of $2.33 billion. Also, last year the company sold Zain Afric BV to Bharti Airtel Limited for more than $10 billion. So what we have is a successful business that operates in growing markets with a solid customer base and healthy financials, and it’s pretty much up for sale.
Etisalat likes what it sees; so the UAE-based company splashed on some aftershave, slicked its hair, and swaggered round to Zain’s HQ to make a proposition. But Zain is a bit like a member of Destiny’s Child; an independent woman, so it’s not keen. Particularly as the Etisalat proposal would involve selling off Zain Saudi, because Etisalat already operates in the country with Mobily. It’s a bit like Etisalat saying Zain has to get rid of Lucy the Labrador, because when they move in together it’s bringing Tyson the German Shepherd.
So part of Zain is thinking: “Well, he is minted… it wouldn’t be so bad married to him.” But other parts are thinking, to the tune of Independent Woman: “The house I live in, I’ve bought it. The car I’m driving, I’ve bought it. I depend on me” etc. So when no fewer than three friendly neighbours came round saying they could give Lucy the Labrador (Zain Saudi, remember) a good home, Zain looked at them all closely, shook its head sorrowfully, and then shut the door abruptly in their faces. The National reports that the offers from Kingdom Holding, Bahrain Telecoms, and a consortium led by Al Riyadh Group, have all been rejected. That’s bad news for the Etisalat buyout, obviously, which hinges on getting Zain Saudi out of the house.
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