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e& approaches Etihad Etisalat (Mobily) to discuss increasing its shareholding in the Saudi Arabia-based telco to 50% plus one share. This can be done by means of a preconditional partial tender offer, pursuant to the M&A regulations issued by the Kingdom’s capital market authority (CMA).

Over the period ending on March 15, e& has proposed a price of SAR 47 per Mobily share, representing a premium of 22.2% to Tuesday’s closing share price of SAR 38.45, as well as a boost of 38.8% and 45.1% respectively to the 3-month and 6-month volume-weighted average prices of Mobily’s shares.

Accordingly, this proposal from e& aims to deepen the strong existing ties with Mobily, with the potential for further collaboration and the realization of greater synergies. It has been clearly emphasized by both parties that there is no certainty of the potential offer’s approval at this stage, with the discussions still ongoing.

Eng. Hatem Dowidar, Mohamed Karim Bennis and Khalifa Al Shamsi have declared their conflicts of interests as they are Mobily board members and currently holding senior executive positions at e&. Hence, they would refrain from being involved in this particular discussion between Mobily and e&.

If the potential offer is made and implemented, it will be subject to compliance with Saudi law and to the applicable requirements of the M&A regulations. e& is being advised by HSBC Saudi Arabia, while Mobily selected JPMorgan Saudi Arabia and Riyad Capital as its financial advisers.

On a separate note, Mobily has recently decided not to renew the agreement for services and technical support with e&, with e& continuing to be a strategic shareholder to the company.

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