Friday, July 3, 2009

Zain Announcement Fuels Sale Rumours

In a short statement to the Kuwait Stock Exchange, Zain has confirmed that it has appointed UBS, and other consultants, to conduct a strategy review of its operations. The company did not comment on the ongoing rumours that it is looking to sell its Pan-African assets.
The sale of the former Celtel assets is estimated to be worth up to US$12 billion, including debt. Celtel was founded by Sudanese-born Mo Ibrahim in 1998 and sold to Kuwait's MTC (now Zain) in April 2005 for US$3.4 billion.
However, a recent analyst note by JP Morgan's Johan Snyman cast doubt on that valuation. "We would argue that based on a normalized net income of $500 million, and earnings before interest tax and dividends of $2.4 billion, that Zain Africa is worth no more than $6.5 billion," he wrote.
Some reports have named Vivendi as the possible bidder, although both companies have declined to comment.
No reason has given so far for why Zain is looking to sell the African division.

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