Batelco and Qtel interested in Zain's Saudi unit?

6 Oct 2010

According to a report by Reuters, Bahrain Telecommunications Company (Batelco) has indicated it is interested in acquiring Zain Group’s stake in cellco Zain Saudi Arabia to expand its operations in the country, whilst there is speculation that Qatar Telecom (Qtel) will show rival interest in the Saudi unit, in which Kuwait-based Zain holds a 25% stake – valued at USD756 million at current prices. The potential deal has arisen following UAE-based group Etisalat’s non-binding offer worth around USD12 billion for a 46% stake in Zain Group – currently under consideration by shareholders – because Etisalat already owns a controlling stake in Saudi’s second-placed mobile operator Mobily and its broadband unit Bayanat Al-Oula. Batelco, which is already present in the Saudi market via a 15% stake in broadband and fixed line operator Etihad Atheeb Telecom (GO Telecom), said its interest in Zain’s subsidiary was ‘very conditional’, with its CEO Peter Kaliaropoulos stating: ‘It is natural that should the opportunity be presented to invest further in [Saudi Arabia], our M&A team will always explore it.’ Following a report on Saturday from Bahrain-based bank Sico, which said Qtel may also bid for Zain’s Saudi stake, the Qatari group stated that the potential purchase would fit with its strategy of looking at opportunities in three regions [Middle East, North Africa and Asia], and that this ‘can involve the analysis of several potential targets at any time,’ although a spokesperson added: ‘As a matter of policy we are not in a position to comment on rumours in the market or the press.’ Qtel currently participates in the Saudi market via a 29% group stake in iDEN-based wireless operator Bravo, via its majority-owned Wataniya subsidiary.