Bahrain's Batelco also interested in Zain assets

Bahrain Telecommunications (Batelco) said it was interested in the Saudi assets of Kuwait's Zain, which is mulling an offer to sell a 46-per cent stake to Emirates Telecommunications (etisalat).

The Bahraini operator said its interest in the Zain Saudi Arabia stake worth approximately $751 million at its current share price, was "very conditional" and depended on a number of factors.

"It is natural that should the opportunity be presented to invest further in (Saudi Arabia), our M&A team will always explore it," Batelco's Chief Executive Peter Kaliaropoulos said in a statement. "However, such an interest is very conditional."

Etisalat has bid 1.7 dinars a share for a 46-per cent piece of Zain, in a deal worth around $12 billion. A major Zain shareholder has said it would accept the offer.

With both etisalat and Zain in Saudi Arabia, the deal would result in the sale of Zain's business in the kingdom.

Batelco is already present in Saudi Arabia through its 15 per cent stake in Etihad Atheeb Telecommunications Co which has won a licence to provide fixed line services in the kingdom under the Go brand.

Atheeb has been struggling to compete with likes of Saudi Telecom  Mobily and more recently Zain Saudi and faces financial restructuring to boost capital after a costly investment program.

A special relationship between the two neighbouring kingdoms may win Batelco favorable treatment from the Saudi regulator, allowing it to invest into two telecom operators at once.