Abu Dhabi, UAE, Thursday, October 21st 2010 [ME NewsWire]:
Q1.Why is Etisalat interested in buying a stake in Zain?
The acquisition would be consistent with our strategy to expand beyond our mature core markets into growth markets.
Q2-The media has been talking about the deal recently, and Etisalat was noticed to be quiet, any reason for that?
A: In fact, we did not want to send the wrong message to the market while we are still working on the details of such a transaction. When we are more certain as to where we stand we will make a formal statement. In any case if we were to proceed we will need to undertake a very detailed due diligence of Zain.
Q3. Some industry observers believe the reported KD 1.7 per share offer price is high.
A: We believe that this deal represents great value to our shareholders, however, we intend to confirm this value through detailed due diligence. We will not proceed unless such valuation is confirmed.
Q4: How has the market in Kuwait reacted to the news of this transaction?
A: Most of the reaction in Kuwait has been very positive, however, as in any high profile transaction, there is some opposition from some shareholders.
Q5. Do you expect that this deal will face any regulatory obstacles?
A. We are confident that we will be able to obtain all necessary regulatory approvals including a solution to the overlapping operations of Etisalat and Zain in Saudi Arabia.
Q6 –How are you considering funding such a transaction?
A: We are confident that Etisalat can obtain the required funding in order to finance the transaction on favorable terms. We have received several attractive proposals from banks that would enable us to finance the transaction.
Q7 –Would the Zain transaction affect the payment of the dividend?
A: According to our preliminary analysis there should not be any negative impact on the dividend payment. We do not want to jeopardize the dividend payment by acquiring Zain.
Q8- Who are the Advisers working with Etisalat on this transaction?
A: A deal of this nature requires internal and external effort. We have two reputable financial advisors working with us as well as specialized firms in the areas of accounting, technical, commercial, and a well known international legal firm, in addition of course to a group of highly experienced executives from inside Etisalat. Careful deliberations about this deal continue to take place at a very senior level, which are taking into consideration a number of aspects connected with the deal.
Q9: What is the status of the discussion with Zain shareholders?
A: As stated we have previously made a preliminary proposal. We are still at an early stage. The due diligence process has yet to start. We will not conclude a transaction until the final results of the due diligence are considered by our board. This will take a number of weeks.
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