Friday, November 20, 2009

Paltel cancels Zain Deal

Palestine Telecommunication Co (Paltel) has announced that it has canceled a deal which would have seen Kuwait-based telecom group Zain take gain a majority stake in the Palestinian operator, Reuters reports.

Paltel claimed that commitments made as part of the deal had not been fulfilled within the agreed time frame, although it declined to provide details on what these commitments were.

Zain has confirmed that the plug has been pulled on the acquisition, although it claimed that its inability to secure the required government approvals was the reason for the deal’s cancellation, although again no further details were provided as to what these approvals were or why they had not been granted.

The two companies announced the deal back in May 2009, with Zain agreeing to take a 56.53% stake in Paltel. Under the terms of the agreement the two companies entered into a share-for-share exchange, which would have seen Zain take the majority stake in Paltel in exchange for Paltel taking 100% ownership of Zain Jordan; the merger would have set Paltel shareholders’ equity position in both Paltel and its newly acquired subsidiary at 41.43%.

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