Qatar Telecom (Qtel), the majority state-held telecoms operator, has offered to buy the remaining 47.5 per cent stake it does not already own in Kuwaiti unit Wataniya, a Kuwaiti bourse statement said on Tuesday.
Based on Wataniya’s current market capitalisation of $3.97 billion, the stake is worth about $1.9 billion, Reuters data shows.
“Wataniya shares were suspended from trading temporary based on the financial market authority’s instructions. The authority has received a bid from Qatar Telecom to takeover the entire transferable shares of the company,” the bourse statement said.
Qtel is being advised by Barclays Capital and the investment banking arm of National Bank of Kuwait, a source with direct knowledge of the matter told Reuters.
The Qtel offer was submitted to Kuwait’s Capital Markets Authority, which is reviewing the proposal, the source said. Based on the authority’s recommendation, Wataniya can review the offer and appoint financial advisors to evaluate it.
Qtel bought the Wataniya stake in 2007 for about $3.7 billion. Kuwait Investment Authority, the Gulf state’s sovereign wealth fund, has a 23.5 per cent stake in Wataniya and the remaining shares are publicly held.
New Kuwaiti capital markets bylaws, introduced last year, requires any entity who buys more than 30 per cent of a listed Kuwaiti firm to bid for the remaining outstanding shares within 30 days.
Kuwait’s No. 2 telecom operator, whose chief executive resigned earlier in June, has operations in Kuwait, Tunisia, Algeria, the Palestinian Territories, Saudi Arabia and the Maldives. In April, it reported a 90 per cent drop in first-quarter net profit, with earnings from the prior-year period boosted by a one-off fair value gain.
Qtel has been raising stakes in its subsidiaries recently.
Earlier in June, Qtel agreed to double its stake in Iraq’s No. 2 operator Asiacell to 60 per cent for $1.47 billion as it seeks to exploit rising demand for broadband.
Qtel also owns a majority stake in Omani telco Nawras.
Shares in Qtel ended down 1.1 per cent on the Doha bourse Tuesday, while Wataniya shares were halted in Kuwait. The statement came after markets closed.