UAE’s e& offers to boost stake in Mobily in $2.12bn deal

E& (formerly known as Etisalat), the biggest phone operator in the UAE, proposed to boost its shareholding in Saudi Arabia’s Mobily in a deal that could be valued at $2.12bn.

E& offered SAR47 a share for a higher stake in Mobily, a 22.2 per cent premium to its Tuesday’s closing price, according to regulatory filings. The offer values Mobily at SAR36.2bn ($9.65bn).

E& hasn’t made a firm offer and the companies are only in discussions at this time. The UAE phone operator already holds 28 per cent of Mobily and is seeking to raise it to 50 per cent plus one share.

Saudi Arabia is the biggest Gulf economy, and the potential purchase is part of e&’s plans to expand in the rapidly growing telecom market in the kingdom. E& “aims to deepen the strong existing ties with Mobily, with the potential for further collaboration and realisation of greater synergies,” according to the company.

E& is being advised by HSBC Saudi Arabia, while JPMorgan Saudi Arabia and Riyad Capital are joint financial advisers to Mobily.

E& market insights:

* Stock advanced 64 per cent in the past 52 weeks. The UAE Abu Dhabi gained 65 per cent
* E& trades at 31 times its estimated earnings per share for the coming year
* The company’s dividend yield is 3.5 per cent on a trailing 12-month basis and 2.3 per cent based on Bloomberg Dividend Forecasts for the next 12 months

Mobily market insights:

* Stock advanced 29 per cent in the past 52 weeks. The Saudi Tadawul gained 28 per cent
* Etihad Etisalat trades at 23 times its estimated earnings per share for the coming year
* The company’s dividend yield is 1.3 per cent on a trailing 12-month basis

Read: UAE telecom major Etisalat Group rebrands as e&