Kingdom Holding Company (KHC), the investment firm run by billionaire Prince Alwaleed bin Talal, has made an offer for Zain's Saudi Arabian unit, the company said in a statement to the Saudi bourse today.
KHC said it has delivered a "non-binding offer" and a preliminary expression of interest to Zain's board of directors to acquire the Kuwaiti operator's 25 per cent stake in its Saudi Arabian unit. The offer is valid until 5:00 pm Riyadh time this Sunday.
Zain's Saudi Arabian subsidiary has been one of the focal points of Etisalat's takeover bid of its parent company. Etisalat, the UAE's largest telecommunications operator, has offered more than $11bn for a 51 per cent stake in Zain worth 1.7 dinars per share.
Etisalat already operates in the kingdom under the Mobily brand and acquiring the Zain unit would not be allowed by Saudi Arabia's telecoms regulators.
"Subject to the acceptance of such a letter by the Zain Board, the non-binding offer is conditional on several factors which will be met before a binding offer is made," Kingdom Holdings said.
"Shareholders of Zain, Zain [Saudi Arabia] and KHC will be informed of any further material developments on a timely basis."
Other operators said to be interested in acquiring Zain's stake in its Saudi Arabian unit include South Africa's MTN Group and Bahrain's Batelco. Executives from MTN and Batelco could not be reached.
If KHC is successful in acquiring a stake in Zain, it would be the first telecoms property to be added to its investment portfolio. Prince Alwaleed, who owns 95 per cent of KHC has focused his investments into banks, hotels and media companies, including acquiring significant stakes in Citibank, News Corporation and Apple.
Etisalat said on Saturday that it has extended the due diligence process to acquire Zain until February. If the acquisition is completed, it would make Etisalat the ninth-largest telecoms operator in the world by subscribers.