Thursday, Jul 21, 2011
(This item was originally published Wednesday.)
DUBAI (Zawya Dow Jones)--Mobile Telecommunications Co. Saudi Arabia (7030.SA), better known as Zain KSA, said Wednesday it had entered into a non-binding agreement with Kingdom Holding Co. (4280.SA) and Bahrain Telecommunications Co. (BATELCO.BH), or Batelco, relating to the two companies' proposed acquisition of a stake in the Saudi mobile operator.
The non-binding term sheet sets out the "key terms of the proposed acquisition," including the due diligence exercise that was approved in principle in June, Zain KSA said in a statement posted on the Saudi bourse website.
Zain KSA's parent, Mobile Telecommunications Co. (ZAIN.KW) of Kuwait, in April accepted an offer from Kingdom Holding and Batelco to buy the 25% stake it owns in the Saudi unit.
The deal is estimated by some to be worth about $1.2 billion and could ease concerns about Zain KSA's balance sheet, analysts have said.
"This [non-binding agreement] means that Batelco and Kingdom Holding, or the consortium, have agreed to broader terms of the deal with Zain and may have submitted an indicative valuation for the stake purchase," said Nishit Lakhotia, a senior analyst at Bahrain-based Sico Investment. "However, as this agreement is non-binding, it means that either of the parties is free to walk away from the deal if they cannot come to mutual agreement."
Zain KSA's shares last traded 0.8% higher at 6.45 Saudi riyals ($1.7) on the Riyadh bourse Wednesday.
-By Angus McDowall and Shereen El Gazzar of Dow Jones; +971-4-446-1685, angus.mcdowall@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
21-07-11 0351GMT
