According to Reuters, Bahrain Telecommunications Company’s (Batelco) USD950 million joint-bid for a stake in Zain Saudi Arabia has been cast into doubt after a dispute over post-acquisition management rights at the company. As previously reported by CommsUpdate, on 14 March Kuwait-based telecoms group Zain accepted a joint offer for its 25% stake in Zain Saudi Arabia from Batelco and Saudi billionaire Prince Alwaleed bin Talal’s investment vehicle, Kingdom Holding Company (KHC).
However, a source who wished to remain anonymous, told Reuters that the long-running transaction may yet be derailed by Batelco’s demand for management rights. The source told Reuters: ‘If Batelco insists on getting the management contract and the Saudis refuse, [the deal] will fail, because Batelco will then come back to Zain with a reviewed and lower offer … which will not be accepted by Zain. Batelco wants to enjoy the same privileges that Zain Kuwait enjoys. But Zain Saudi does not see why it should grant Batelco such rights when it can manage the firm on its own. If Batelco drops out of the deal, Kingdom [Holding Company] might want to proceed as an investor, and it will not be required to operate the firm, because Zain can take on the management’.
According to Reuters, Zain Saudi Arabia currently pays about 4% of its annual revenue to the Zain group for the management of the cellco. Batelco CEO Peter Kaliaropoulos has yet to comment on the reports.