Batelco and Kingdom Holdings’ joint $950 million bid for a 25% stake in Zain KSA is facing problems related to management rights, according to a report from Reuters.
Kuwait-based Zain Group accepted an offer from Batelco and Kingdom Holding to buy its stake in Zain KSA in March, but the deal now appears to be facing its first hurdle.
A source close to the proceedings told Reuters that the deal could fail because of a potential disagreement about who will manage Zain KSA.
Batelco is keen to manage the operation and could lower its bid if it is unable to gain management rights, the source said.
“If Batelco insists on getting the management contract and the Saudis refuse, it (the deal) will fall because Batelco will then come back to Zain Kuwait with a reviewed and lower offer ... which will not be accepted at all by Zain Kuwait,” the source told Reuters.
The source added that Batelco wants to “enjoy the same privileges” as Zain Kuwait, which apparently received 4% of Zain KSA’s annual revenue for managing the unit.
Speaking to CommsMEA last week, Kaliaropoulos said that he was optimistic about the deal, which he said could be completed by July 22 if the due diligence process progressed smoothly.
In Q1, Zain KSA reduced operational losses by 46% to SR233 million ($62 million), compared to SR435 million in the same period last year. Revenues reached SR1.5 billion, a 36% increase compared to same period in 2010.