Kuwaiti telecoms group Zain has said that it still hoped to sell its African unit despite French media and telecoms giant Vivendi, calling off talks to buy a majority stake in the business.
Vivendi said it ended discussions as the investment was not consistent with its financial criteria.
Zain, the Gulf Arab region's third-largest telecoms firm by market value, responded by saying it was still conducting a review of its African unit to maximise shareholder value and would 'only consider approaches that achieve this'.
Zain, which is being advised by UBS, said several parties had expressed interest in its African operations, although any sale would not include its Moroccan and Sudanese units.
Zain CEO Saad Barrak told Reuters earlier this month the firm was in early talks with potential buyers for a stake in its African operations and could consider a partner for a 25 per cent stake.
A France Telecom spokesman said it had been named in a Kuwaiti newspaper report as a potential bidder but the company was not interested in acquiring the business.
Kuwaiti newspaper al-Qabas reported on Monday that Zain had rejected a bid from Vivendi to buy a 65 pecent stake in Zain Africa for about $10.5 billion.
The paper did not give a reason for the rejection but said it could be related to the method of payment.
Analysts voiced concern over difficulties raising a significant amount of funds in the current climate, and noted that a large acquisition could endanger Vivendi's debt rating.
Bankers said earlier this month Vivendi was seeking a 4.5 billion euro syndicated loan to back its acquisition of a majority stake in Zain's African telecom operations.
Zain, whose biggest shareholder is Kuwait's sovereign wealth fund, has spent more than $12 billion to expand in Africa since 2005 and plans to use another $2 billion this year.
'This is a very big operation so everyone will be cautious,' Gopi said, adding only a handful of top telecoms names would have the capacity or appetite to take on the venture. — Reuters
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