Kuwaiti group Zain agreed to sell the 25 percent stake to Batelco and Kingdom Holding Co. in March.
Batelco wants the right to manage Zain Saudi if the deal goes through or will lower its bid, 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 said.
Batelco Chief Executive Peter Kaliaropoulos would not comment.
Zain Saudi pays about four percent of its annual revenue to Kuwaiti Zain for management, the source said.
Zain Saudi’s revenue more than doubled in 2010 to SR826 million ($220 million), while its operational loss narrowed to 179 million.
“Batelco wants to enjoy the same privileges that Zain Kuwait enjoys. But Zain Saudi does not see why it should grant Batelco such rights when it can manage the firm on its own,” the source said.
Zain Saudi paid a hefty $6 billion for its license and has borrowed heavily to protect its market share from Saudi Telecom Co. and Mobily, which is affiliated to Emirates Telecommunications.
“If Batelco drops out of the deal, Kingdom Holding might want to proceed as an investor and it will not be required to operate the firm, because Zain Saudi can take on the management,” the source added.
The Zain Saudi stake sale was an offshoot of Etisalat’s failed $12 billion bid for Zain.
While that deal fell apart in March, the sale of Zain Saudi proceeded.
