Kuwait-Mubasher: Saudi Telecom Company (STC) will offer shareholders KWD 1 ($3.30) per share to buy 74% stake of VIVA Kuwait, according to a statement issued by Moody’s.
“The acquisition is credit positive for STC because the company will benefit from greater dividend flows from an increasingly cash-flow-generative VIVA in the high average revenue per user (ARPU) Kuwaiti mobile sector,” said Moody’s.
STC has agreed to acquire the Kuwaiti government’s indirect 24% stake at the same price per share as offered to the remaining 50% equity holders.
If the tender offer is fully subscribed, it would lead to a cash outlay for STC in excess of $1.2 billion (SAR 4.6 billion).
Moody’s noted that STC intends to fund this outflow from available cash resources, with a total in excess of $5.90 billion (SAR 22.1 billion).
Once STC fully acquire Viva, it will further strengthen its influence on long-term strategic and financial policies.
The tender offer has the Kuwait Capital Markets Authority’s approval. Thus, shareholders have from 27 December, 2015 to 31 January, 2016 to either approve or decline the offer.
