KSA’s sovereign fund to acquire 60% of Zain towers
Saudi Arabia’s sovereign wealth fund proposed a non-binding offer to acquire a 60 percent stake in Kuwaiti-backed Zain’s KSA towers with various investors offering to buy another 20 percent, leaving the telco’s assets with an $807 million valuation, according to Zain KSA.
The Public Investment Fund (PIF) offered a whopping $484 million for 60 percent in Saudi Arabia’s Zain towers infrastructure in a filing with the Saudi Stock Exchange (SSE). The non-binding offer gained the telco’s board approval with Prince Saud bin Fahed bin Abdel-Aziz Al-Saud and Sultan Holding Company, each owning a 10 percent stake respectively.
With Zain maintaining a 20 percent stake of the unit, including wireless communication antennas, software, technology, and Internet Protocol (IP), the three investors would have majority ownership of over 8,069 towers.
Kuwait-based Zain currently owns 37.05 percent, with Faden Trading & Contracting Establishment owning 5.97 percent, and Saudi Plastic Factory owns 5.85 percent of Zain KSA, according to Nasdaq.
As for the deal’s final approval, Zain KSA announced that the company is working “with different parties on the best way to execute the offer” since typically, any stakes acquisition requires regulatory approval.
Once the deal is finalized, it would be KSA’s first telecoms infrastructure sale. Even though in the past couple of years, the Kingdom’s mobile operators, STC, Mobily, and Zain Saudi Arabia, crafted their best efforts to close internal deals with each other or with foreign investors.
“The offers submitted do not represent any binding commitment and the final agreements are subject to the approval of the official authorities, internal approvals of the respective acquirers, the completion of satisfactory due diligence by the acquirers, and any other conditions that may be agreed between the parties,” Zaid KSA said in a statement.
Earlier this year, a joint venture between Zain KSA and the Kingdom’s telecom firm Etihad Etisalat Co., or Mobily, was meant to merge towers of both providers under one sovereignty. However, before closing the deal, Mobily dropped any plans on the matter under the pretense of “strategic reasons” – which were never revealed by the company.
It is worth highlighting that if the merger plans came to fruition, Etisalat would have fulfilled its 2015 vision of selling its Saudi Arabian mobile towers.
For a while now, a global spotlight has been focused on mobile tower infrastructure sales.
On Tuesday, Dutch-domiciled telco Veon disclosed plans of dropping 100 percent of its Russian tower subsidiary National Tower Company (NTC) to Service-Telecom for an estimate of $970 billion. By doing so, the company gave Tower Company absolute ownership of Veon’s NTC towers division.