State-backed telecoms operators in the Gulf are building a shared home for their mobile towers. A three-way partnership deal will enable Qatar’s Ooredoo (ORDS.QA) to offload capital-intensive infrastructure but only by offering Kuwait’s Zain (ZAIN.KW) favourable deal terms.
The deal comes 15 months after Ooredoo announced plans to put its towers on the block. The sale drew initial interest from Saudi Arabia’s sovereign wealth fund PIF, Bloomberg reported, at a mooted price of $3 billion to $5 billion. The transaction announced on Tuesday is not in the same league. Ooredoo is contributing around 20,000 towers to the combined company and will get cash from Zain to equalise their respective stakes. But Zain is paying an average price of $73,000 per tower, 9.5% less than the average price per tower in previous deals, according to JPMorgan analysts. The Kuwaiti group will also call the shots as the founders of Dubai’s TASC Towers Holding – which Zain controls with an 83.47% stake – will manage the new entity.
That said, the deal will allow Ooredoo to retain a big chunk of any improvements in the towers’ performance. Having missed out on a previous wave of dealmaking, striking a partial exit is better than staying put. (By Pamela Barbaglia)
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