Qatar’s Qtel has made a $2.2 billion offer for the 47.5% share of Kuwait’s Wataniya it does not already own.
The operator says it has already won the approval of Kuwait’s Capital Markets Authority for the deal.
The announcement comes just two months after Qtel doubled its stake in Iraq’s Asiacell to 60% for $1.47 billion.
Backed by the cash-rich Qatari state, Qtel is increasing its holdings in fast-growing businesses at a time when other big telecoms operators would struggle to fund deals.
Wataniya operates in Tunisia, Algeria, the Palestinian Territories, Saudi Arabia and the Maldives, besides Kuwait.
Although Wataniya reported a 49% drop in second-quarter net income, due to currency movements and the intensification of competition in Kuwait, many of its markets are poised for continued subscriber growth.
Wataniya’s shares had been trading at 2008 levels before Qtel made its offer, due to investor concern over its current weak performance.
Qtel’s offer represents an 18% premium over Wataniya’s last traded price, but needs to win the support of the Kuwait Investment Authority, which owns 23.5% of Wataniya’s shares.
That is by no means a certainty, according to a Reuters news story published this week. In 2010, when the UAE’s Etisalat made an offer for Kuwait’s Zain, the KIA is reported to have scuppered the deal by refusing to sell its holdings in the company, according to an undisclosed source quoted by Reuters.
At the time, the failure of the deal was blamed partly by Etisalat on divisions within Zain’s board.