Mobily says e& seeks potential stake hike for SAR 47/share

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Etihad Etisalat Co. (Mobily) said Emirates Telecommunications Group Co. (e&) has approached to discuss increasing its shareholding in Mobily to 50% plus one share using a pre-conditional partial tender offer under the merger and acquisition regulations issued by the Capital Market Authority, according to a bourse filing.

The UAE-based telecom operator seeks to reach an agreement with Mobily’s board of directors in respect of the conditions applicable to the potential offer (including its implementation), which could be recommended by Mobily to its shareholders.

e& has proposed a price of SAR 47 per Mobily share, which represents a premium of 22.2% to Mobily’s closing share price of SAR 38.45 on March 15, 2022; 38.8% to the volume-weighted average price (VWAP) of Mobily shares over the three-month period ending March 15; and 45.1% to Mobily’s VWAP over the six-month period ending March 15.

e& informed Mobily that the potential offer and proposed discussions align with e&’s strategic objectives to expand and optimize its portfolio by pursuing opportunities within its existing footprint, particularly the rapidly growing Saudi market.

The UAE telco also seeks to deepen its strong ties with Mobily, with the potential for further collaboration and realization of greater synergies.

e& has not yet declared a firm intention to make a potential offer at this time.

Further announcements relating to any developments will be made in due course, including the structure of the transaction, price, terms and conditions of the offer (if made), as well as the applicable timetable and procedures.

In a separate filing, Mobily said its board had discussed the proposal, adding the proposed offer price represents a premium to its share price, as set out in the Mobily announcement made earlier today. Therefore, the Mobily board believed it is appropriate to further discuss the details and conditions of the potential offer with e&.

e& remains able to formally launch an offer at any time should it choose to do so, subject to applicable regulations, without having to come to an agreement with the Mobily board.

Mobily and e& are only in discussions at this time, the statement said.

If the UAE telco proceeds to make an offer, it will be announced at the relevant time and will be subject to certain conditions. In addition, e& will publish an offer document which will contain the final terms and conditions of the offer.

Furthermore, Mobily board will issue a circular which will set out its recommendation on the offer and the relevant financial advice that the Mobily board would receive.

Mobily’s Hatem Dowidar, Mohamed Bennis and Khalifa Al Shamsi also serve as senior executives at e&. They declared a conflict of interest in relation to the discussions between Mobily and e&, and abstained from any participation in the current talks.

Mobily appointed JP Morgan Saudi Arabia and Riyad Capital as joint financial advisers, and Abuhimed Alsheikh Alhagbani Law Firm as legal adviser.

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