The investment company headed by Saudi billionaire Prince al-waleed bin Talal and Batelco Group on Thursday dropped their $950 million bid for a quarter of Kuwaiti telecom Zain Group's Saudi division, saying they failed to get the terms they wanted.
Alwaleed’s Kingdom Holding Co. said in a statement the decision was in the best interest of both suitors' shareholders. It didn't spell out details for abandoning the months long acquisition effort.
“This follows a period of due diligence and discussions with Zain Group and other stakeholders. The consortium concluded that the terms and conditions as set out in its nonbinding offer could not be met to its satisfaction,” Kingdom Holding said.
The companies launched their joint bid for the 25 percent chunk of the Saudi unit, commonly known as Zain KSA, in March. Kingdom Holding had earlier expressed an interest in pursuing the stake on its own failed to win interest from Zain's board.
Kuwait-based Zain owns 25 percent of the Saudi division that shares its name. The other 75 percent of Zain KSA is split between public and private shareholders.
Zain said it will continue to back the unit.
“Zain Group, acting in the best interest of its shareholders, looks forward to assisting Zain KSA in the development of the latter’s mobile telecommunications business in the kingdom in the future,” the company said.
Zain had been seeking to sell its stake in the Saudi division to satisfy regulators as part of a separate, $12 billion merger effort led by Emirati telecom giant Etisalat.
That deal fell through shortly after Kingdom and Batelco launched their joint bid, removing some of the pressure on Zain to unload the debt-laden subsidiary.
“That original rationale was removed,” said Matthew Reed, a Dubai-based analyst at Informa Telecoms & Media, a research firm. “There’s no overwhelming reason why Zain Group has to sell Zain KSA” now, he added.
Zain KSA ranks a distant third in the kingdom's telecom market behind larger mobile operators STC and Mobily.