(Adds Vodafone was the seller)
By Matt Smith
DUBAI, May 7 (Reuters) - Zain has bought a 6.25 percent stake in its Bahraini subsidiary from Vodafone for $12.5 million, upping the Kuwaiti firm’s stake to 63 percent which will allow it to retain majority control after the unit’s stock market listing.
The acquisition values Zain Bahrain, which must sell 15 percent of its shares in an initial public offering (IPO) and list on Bahrain’s bourse as stipulated by its licence terms, at $200 million.
Zain said in a statement on Wednesday that it had bought the stake from “other shareholders” without elaborating, but Vodafone separately told Reuters it had sold its entire 6.25 percent stake in Zain Bahrain.
Zain did not explain why it had done the deal, but in December Chief Executive Scott Gegenheimer said his company wanted to retain majority control of the subsidiary.
Zain previously held a 56.25 percent stake in Zain Bahrain, so selling the IPO on a proportional basis would have led the Kuwaiti firm’s stake to drop below 50 percent. Upping its holding to 63 percent ahead of the IPO has removed that danger.
In February, an industry source told Reuters that Zain Bahrain aimed to launch the share sale by the end of June.
Gulf countries often stipulate in telecom licences that operators list on the local stock market to help diversify the bourse. (Reporting by Matt Smith; Editing by Pravin Char and William Hardy)