LAHORE ( MEDIA )
Ongoing due diligence between Etisalat and Warid for the buyout of the Abu-Dhabi Group’s cellular service provider has remained inconclusive as Warid called off negotiations when it wasn’t able to get its desired price, said a Warid official on Tuesday. The News clamied.
“The ongoing discussions between the Abu Dhabi group and PTCL for the merger and acquisition of Warid Telecom Pakistan have been called off,” confirmed a Warid official to The News. “The decision has been taken by the shareholders of Warid Telecom Pakistan since an agreement could not be reached on the desired valuation for the company.”
The shareholders, he said, firmly believe that the company has strong fundamentals and have decided to focus on further enhancing its value and will continue to provide innovative telecom services to the company’s loyal subscriber base.
Earlier, two other cellular giants operating in Pakistan had shown interest in buying Warid. However, one of the world’s largest cellular companies did not take part in bidding and the other player also backed out after making an initial bid. Earlier news reports suggested a possible merger between the two UAE-based companies (Etisalat and Warid) in which the Etisalat group was likely to acquire 51 per cent shares of Warid. However, negotiations between the two subsequently ran aground.
Warid launched its cellular services in Pakistan in May 2005 and with almost 12.5 million subscribers, was the country’s smallest operator. However, unlike other telcos, it has a fiercely loyal postpaid customer base.
The other operators in Pakistan are Oslo-based Telenor, Orascom Telecom, which operates under the name Mobilink, China Mobile Pakistan’s Zong and Etisalat’s Ufone.
In 2007, Singapore Telcommunications bought a 30-per cent stake in Warid for about $758 million. That stake purchase gave Warid Telecom an enterprise value of about $2.5 billion. SingTel sold back that stake in January for $150 million and a right to receive 7.5 percent of the net proceeds from any future sale, public offering or merger of Warid.