Warren Buffett“A public opinion poll is no substitute for thought.”
Adlin Sinclair“Success is a welcomed gift for the uninhibited mind.”
Zain board approves $10.7 billion Bharti bid for Africa ops (Reuters)
ZAIN.KW
BRTI.BO
), state news agency KUNA and a person familiar with the matter said on Sunday, in a deal valued at $10.7 billion.
in years and a turning point in the long-running saga around the third-biggest telecoms operator in the region.
“Bharti put forward the most compelling offer, but there were offers from others that could come back if Bharti fails to deliver a deal,” said the person familiar with the matter.
Zain's board agreed to exclusive talks until the end of March with Bharti, subject to conditions including
, the person said, adding that the board's decision was unanimous.
The Kuwaiti bourse suspended trading in Zain shares before the open but optimism that the deal would be approved sparked a rally in Kuwaiti shares, pushing the benchmark index (.KWSE) up 1.8 percent, in its biggest gain in 6 months.
“If the transaction values the African operations at $10.7 billion, it would be a nice premium,” said analyst Simon Simonian at
Shuaa Capital. “We expect Zain to pay a special dividend to shareholders from the proceeds.”
rise to international status and then revert to that of a regional player. Zain has spent more than $12 billion alone to expand in Africa since 2005.
's faltering aspirations to diversify its economy beyond the oil sector.
“Zain grew a little bit too fast and was facing some growing pains in the past two years,” Simonian said.
's MTN (MTNJ.J) failed in September.
In October,
, deputy group CEO at the Indian mobile operator's parent, said Bharti would look at buying a stake in Zain if there was an opportunity.
Last month, Bharti agreed to buy 70 percent of
for an initial investment of $300 million. It also set up a new unit to drive its foreign expansion, focused on opportunities in emerging markets, where it can replicate its low-price, high-volume model.
is facing margin pressures from intense competition and price wars, resulting in lower tariffs and shrinking profits.
harbored valuable growth.
VIV.PA
) for its African assets. It then halted talks to sell the assets to appease potential buyers of a 46-percent stake in the parent company.
A consortium of Asian investors has been trying to buy the 46 percent stake from Kuwaiti family conglomerate Kharafi Group for 2 dinars per share, or about $13.7 billion, although selling the African operations would likely end that initiative.
In one indication of an imminent deal, Zain last week appointed Nabil bin
as the company's chief executive, replacing Saad al-Barrak, seen as the driving force behind the growth into 23 countries across
.
Barrak resigned earlier this month amid uncertainty about the fate of the sale of the parent company stake.
Last May, Zain announced a rare cut of 2,000 jobs of its 15,500 workforce, signaling that the heyday of expansion might be over.
Africa represents about 62 percent of Zain's 64.7 million customers but only 15 percent of the groups'
. Zain operates in 24 countries including
and Nigeria.
.
; Writing by Thomas Atkins, Editing by Mike Nesbit and Gunna Dickson)