KUWAIT, 28 November 2007 — Saudi Telecom Co. won a 26 percent stake in Kuwait’s third mobile phone company yesterday with a 248.7 million dinar ($907.7 million) bid, Adel Al-Roumi, chairman of the Kuwaiti firm’s founding committee said.
STC’s bid of 248.7 million dinars ($907.7 million) beat rivals including Turkcell, the state-owned Kuwait Investment Authority (KIA) said yesterday. The KIA is managing the sale. Shares of Saudi Telecom, the largest Arab telecom firm by market value, rose after the news but were down 0.96 percent at 0924 GMT.
The Kuwaiti mobile phone company will also sell a 50 percent stake to the public for 105 Kuwait fils per share in a February initial public offering, the chairman said.
“The price for IPO shares will be 105 fils,” he said.
The company would decide when to start operations after the IPO, Al-Roumi added.
“Kuwait is very important for Saudi Telecom,” Saudi Telecom Chief Executive Officer Saad Al-Duweish told Al-Arabiya TV. “We expect to take 30 percent of the market over the next 10 years ... it is an attractive market.” Nine firms and groups competed for the stake, including a group consisting of Bahrain Telecommunications Co. (Batelco) and Islamic firm Investment Dar.
Other bidders were Kuwait’s Global Investment House, and a group including Commercial Bank of Kuwait.
The new operator will compete with Mobile Telecommunications Co. (Zain) and National Mobile Telecommunications Co. (Wataniya) in the nation of about 3 million people. Kuwait has a mobile penetration of more than 90 percent.The government will in February sell another 50 percent of the company in an initial public offering open to Kuwaiti citizens only and retain 24 percent of the company.
Saudi Telecom has been expanding abroad as competition at home intensifies. In June, it agreed to buy 25 percent of Malaysia’s Maxis and 51 percent of its Indonesian unit for $3 billion.
Separately, in Amman, Kuwait’s Noor Financial Investment Co. had agreed to buy a 11.6 percent holding owned by the Jordanian government in Jordan Telecom that raises it’s stake to 21.6 percent, a company official said yesterday.
Eyad Rashad, general manager of Noor’s Jordanian subsidiary, told Reuters a 4.66 dinars ($6.57) per share price was set for the sale of nearly 29 million shares owned by the government in the country’s sole fixed line operator in a deal to cost a total 135 million dinars ($190 million).
“The price has been agreed but it’s a big deal so it must take it’s time. Maybe in the next few weeks. We are ready but awaiting the government’s next move,” Rashad said.
Noor, which already owns a 10 percent stake in Jordan Telecom which it bought in July last year for $115 million, has since last year stepped up its Jordanian investments, eyeing infrastructure projects, including energy and electricity, alongside financial investments.
The Kuwaiti investment firm already has a 25 percent stake in a consortium led by Paris airports operator Aeroports de Paris that won a project to rebuild and operate the country’s main Amman Queen Alia airport at a capital investment of around $600 million.
Jordan Telecom, in which France Telecom owns a 51 percent stake, has about 678,000 land lines and a mobile subsidiary with around 1.66 million subscribers.