The United Arab Emirates’ biggest telecommunications company Emirates Telecommunications Corporation (Etisalat) has announced plans to sell most of its stake in Indonesian mobile operator XL Axiata, aiming to raise up to USD502 million in what will be the Asian country’s biggest block offering since December 2010. The UAE-based group owns 13.29% of the Indonesian company, which it acquired in 2007 for USD440 million, but has struggled to develop a working relationship with XL Axiata’s main shareholder, Axiata Group of Malaysia. Current estimates value the cellco at around USD500 million, considerably less than the USD600 million-USD700 million placed on it when rumours of a sale first emerged earlier this year. XL Axiata’s share price has leapt almost 50% in 2012, compared with an 8.7% rise in Indonesia’s benchmark share index, Reuters notes.
Etisalat is offering XL Axiata shares at a price of between IDR6,100 to IDR6,300 (USD0.639 to USD0.660), equivalent to a discount of up to 9% on the operator’s price of IDR6,700 per share when trading closed yesterday. The total offer of a maximum of 775 million XL Axiata shares would value the deal at IDR4.88 trillion. JPMorgan and Morgan Stanley have been retained to manage the sale.