NEW DELHI - India's state-run telecom giant BSNL said the 14-billion-dollar price tag for a 46 percent stake in Kuwait's Zain telecom was too high, and capped its offer at 10 billion dollars, a report said Monday.
India's Bharat Sanchar Nigam Ltd. and Mahanagar Telephone Nigam Ltd. are part of a consortium, led by New Delhi-based Vavasi Group and Malaysia's Al Bukhary Group, that wants to buy 46 percent of Zain -- Kuwait's largest mobile operator.
The Business Standard newspaper reported that BSNL was willing to offer no more than 10 billion dollars for the holdings, compared to the 14 billion dollars wanted by its current leading shareholders, the Al-Khorafi Group.
"We think at the current price the deal will be very expensive," the paper quoted BSNL chairman and managing director Kuldeep Goyal as saying, without mentioning an alternative price.
The Al-Khorafi Group wants to offload its stake in Zain for two Kuwaiti Dinars (seven dollars) per share, and its asking price represents a 36 percent premium compared to Zain's stock closing price on Monday.
Zain shares dropped 5.9 percent at the close on Monday, sliding to 1.280 dinars from 1.360 dinars following the report, traders said. It pulled the services sector down one percent.
Since the preliminary deal was signed early September, stock price of Zain lost around 18 percent, but is still up 52.4 percent on last year's close.
The Business Standard quoted a Vavasi executive as saying the price was negotiable.
Goyal said BSNL would investigate the potential deal with both Zain and Vavasi Group before making a decision.
Zain, one of three mobile operators in Kuwait, is the largest listed firm on the Kuwait Stock Exchange and has a capitalisation of 18.9 billion dollars. It has 72 million clients in 24 countries.