UAE’s “Etisalat” seeks to increase its stake in Saudi “Mobily”

The offer is to buy 22% of Mobily Shares at 47 riyals per share
UAE’s “Etisalat” seeks to increase its stake in Saudi “Mobily”

UAE’s “Etisalat” Group submitted an offer to increase its stake in the Saudi company, Etihad Etisalat (Mobily), by 50 percent plus one share.

Mobily, listed on the Saudi market, announced today that it had received an offer from the UAE’s Etisalat Group to increase its stake in the company from 27.99 percent to a controlling stake, by purchasing additional shares at a value of 47 riyals ($12.5) per share, which represents an increase of 22.2 percent higher than the closing price of the company’s share in the Saudi stock market on Tuesday.

Mobily’s board of directors decided to continue discussing the terms and details of the potential offer with Etisalat Group.

The company said in a statement to “Tadawul” that “it was contacted by the UAE’s Telecommunications Group to discuss increasing Etisalat Group’s stake in Mobily to 50 percent in addition to one additional share through a partial offer subject to preconditions (“the potential offer”) and to the Merger and Acquisition Regulations issued by the Capital Market Authority.

In other words, “Etisalat” currently owns about 28 percent of “Mobily” shares, which means that it is seeking to buy an additional 22.2 percent (169.4 million shares) of the Saudi company’s shares, bringing its total ownership to “50 percent + 1 share”. This means that the value of the deal, if it takes place, will amount to about 8 billion riyals, according to “Bloomberg.”

The “Etisalat” group proposed a price of 47 riyals per share for the purposes of the “potential offer”, which represents an increase in the share price of “Mobily” by 22.2% compared to the closing price of the “Mobily” share of 38.45 riyals yesterday, and by 38.8% compared to the weighted average price.

The volume-weighted average price of Mobily’s shares for the three-month period ending on March 15, 2022, increased by 45.1 percent compared to the volume-weighted average price of Mobily’s share for the six-month period ending yesterday.

Etisalat Group notified Mobily that the potential offer and the discussions associated with it are in line with the strategic objectives of the Etisalat Group to expand and improve the performance of its investment portfolio by exploiting the opportunities available within its current investments, especially expanding its investments in the growing Saudi market.

Etisalat clarified that, through its potential offer, it aims to strengthen its strong ties with Mobily, improve cooperation between the two companies and achieve mutual benefits.

Saudi Mobily’s profits rose in 2021, to the highest level since 2013, supported by the growth in sales of the business and individual sectors, in addition to the increase in the customer base. The company achieved a growth of 36.8% in net profit to reach 1.07 billion riyals, compared to a profit of 783 million riyals for the year 2020.

As for the “Etisalat” group, which is listed on the Abu Dhabi Stock Exchange, its net profit rose by 3.2 percent last year to reach 9.3 billion dirhams.