Omantel has won the bid to acquire 425.7 million treasury shares representing 9.84% of Zain's fully paid in and issued share capital at an offer price of KWD 0.600 per share, representing a total cash consideration of $ 846.1 million (KWD 255.4 million / OMR 325.6 million).
Bader Al-Kharafi, Zain vice chairman and group CEO, said: "We welcome Omantel's investment in Zain, and we look forward to exploring mutually beneficial synergies and business enhancing opportunities across the region. The strategic visions of both Zain and Omantel complement each other as do our cultures, and we are confident that this deal is value-enhancing to all our stakeholders on multiple fronts.
The liquidity from this transaction brings many immediate and significant benefits to Zain as it enhances our financial flexibility as we continue to seek opportunities in the digital space and invest in upgrading our modern networks to enhance the mobile experience for our customers. Additionally, the deal allows us to reduce our debt levels as well as increasing our shareholders' equity," Al-Kharafi added.
Talal Said Marhoon Al Mamari, chief executive officer, Omantel, said: “The global telecoms market is changing fast, and our region has not escaped this trend. Data and content is where growth lies and investing in innovative digital products is critical to building a stronger company. In this competitive environment, our acquisition of a minority stake in Zain Group is a strategic move for Omantel as we continue to deliver against our Corporate Strategy 3.0, create value for shareholders, diversify our revenue, raise our regional profile, and mitigate the risk of operating in a single market.”
Al Mamari added: “Omantel is the incumbent player in Oman, with expertise in fixed, mobile and broadband networks and wholesale operations. We have long admired Zain for their deep digital expertise and regional footprint which is highly complementary to ours. Building on our respective strengths, we believe that together we can accelerate collaboration and innovation to ultimately deliver better services and content for our customers in Oman and the region, now and for the future.”
Khaled Al-Khaled, CEO of Boursa Kuwait, said: “Today, this deal stands as an important indicator of the growing trust and confidence investors have in the Kuwait market. Boursa Kuwait will continue to develop the operations of this exchange in line with its three main pillars of efficiency, transparency and accessibility”.
As announced on 10 August 2017, Zain and Omantel entered into a share purchase agreement (“SPA”) for Zain’s treasury shares. This announcement triggered a formal block trade auction process under Boursa Kuwait rules, which culminated in a ceremony hosted by Boursa Kuwait to mark the successful closing of the transaction. The ceremony was held in the presence of the Zain Vice-Chairman and Group CEO, Bader Nasser Al-Kharafi; CEO of Omantel, Mr. Talal Said Al Mamari; and CEO of Boursa Kuwait, Khaled Al Khaled. Participating parties lauded the smooth operations and processes in Boursa Kuwait.
The sale will now be executed and the treasury shares converted into common stock. Following this conversion, Omantel will hold 9.84% of Zain Group, with the corresponding voting rights and dividends attached to common stock.
The transaction will be fully debt financed by Omantel. S&P and Moody’s have retained Omantel’s ratings of “BB+ / Negative / B” and “Baa2 negative,” respectively, following the announcement of the transaction on 10 August 2017.
Citigroup Global Markets Limited served as exclusive financial advisor and Meysan Partners as legal advisor to Zain. Credit Suisse acted as exclusive financial adviser and Freshfields Bruckhaus Deringer LLP as legal adviser to Omantel.