If a Middle Eastern business owner came home from his summer vacation to find a stranger sitting on his patio with a business proposal, he might greet him with the typical Arab friendliness toward surprise guests. But if turns out that the stranger has pried open a backdoor and occupied the home, demanding payment to vacate the site, the owner would be outraged and unceremoniously evict the strange visitor. However, when it comes to the websites of newly announced projects, regional business owners are often in a pickle when it comes to guarding their property.

Researching the registration rates of online domain names by Middle Eastern companies, a UK-based marketing and public relations firm uncovered that many business owners seem rather careless in setting up their online presence. The three-month study conducted in the second quarter of 2007 by the firm Ultimate Media found that of 2,000 firms who have announced the name of major construction projects, at least 220 did not buy the internet domain in advance.

Dubai is really the only place where they’ve

realized the importance of securing a domain

In a significant number of cases, third parties have bought the domain name with an eye toward selling it to the project owner at a later date — a practice known as cyber squatting. It’s not quite as intrusive as a stranger raiding your cupboards and settling into your favorite chair while you’re out of town, but it could be much more financially devastating.

Although he declined to quantify the amounts under dispute or provide a list of companies afflicted by the problem, Arya Marafie, project coordinator with Ultimate Media, told Executive that in some cases, third parties are purchasing domains and designing websites for non-existent companies that share names with major construction projects. “It seems that project owners just don’t realize the significance of announcing a project without securing [a domain name],” he said.

Quite simply, the aim of cyber squatting is extortion. By grabbing a domain before a company with vested interest in the site, a cyber squatter can attempt to sell the domain to that company for an exorbitant price.

Registering the domain

Buying a domain — the address of a specific point on the internet — is easy and inexpensive. The most common domains — generic top-level domains (gTLDs) like dotcom, dotnet or dotgov — are all managed by US-based Verisign, Inc., which typically sells them to one of the hundreds of domain registrars operating worldwide. 

The average person or company looking to buy a domain will usually buy it from a domain registrar by providing some personal information and, depending on the registrar, as little as $9 per year.

Cyber squatting is not a new problem and has been addressed by landmark international treaties. In the early 1990s, when the internet’s surge in popularity surprised many companies, hordes of opportunist online entrepreneurs took to registering domain names for no other purpose than selling them later on. This led to a deluge of domain disputes between cyber squatters and companies (and celebrities) who argued that they have an intrinsic right to own the internet domain carrying their name (typically, these were dotcom domains).

Initially, however, companies that found their name had been registered by an usurper often had no other recourse than paying through the nose and booking the useless expense as learning experience. The party responsible for managing gTLDs, the Internet Corporation for Assigned Names and Numbers (ICANN), was not sure how to resolve the issue.

The UN’s trademark and copyright enforcement arm, the World Intellectual Property Organization (WIPO), conducted worldwide consultations to figure out how to establish a protocol for handling domain disputes. WIPO published a report that became the basis for the Uniform Domain Name Dispute Resolution Policy (UDRP). The policy was adopted by ICANN in 1999 with WIPO primarily resolving disputes. All 184 WIPO member states must comply with the body’s decisions.

Here’s where things start to get tricky. The key element of the dispute resolution process is whether the owner of the domain purchased and is using it in “bad faith.” If two legitimate companies have the same name, the domain goes to whichever purchased it first. If a cyber squatter purchases a domain with the aim of selling it to the company for an exorbitant amount of money, WIPO (or an ICANN-authorized body) will grant the rights to the domain to the company with a legitimate interest.

The loophole that cyber squatters are trying to exploit is the first-come first-serve rule for legitimate businesses. To do this, they not only buy the domain name as soon as a developer announces a major real estate project, which can be anything from a residential tower to a whole new city — they also fake the appearance of corporate activity through bogus site content. 

“There are people who are intentionally registering primary dotcoms related to projects as soon as they’re announced,” Marafie said. “Some of those people not aware of the regulations. They are just registering huge numbers of domains and keeping them in their own names, a bad business decision because they’ll probably lose them fairly easily when it comes to a dispute.”

The smart ones, however, can create serious problems for project owners. These cyber squatters establish an illusion of corporate life by moving those domains around on different servers and developing bogus sites on those domains. Project owners who failed to take advance action of registering a domain name will have “a major problem” if they find themselves having to deal with one of those smart occupiers and having to fight them in courts, according to Marafie. 

The cyber white knight

The PR expert has a stake in alerting companies to their oversights in domain registrations, by acting as a white knight. Ultimate Media conducted its research into site registrations to build a prospective customer list in the region. They found 221 domains of announced projects that were registered neither by cyber squatters nor by the respective project developers. In those cases, Ultimate Media bought the site pro forma and posted a message offering it to the project’s owner free of charge.

In so doing, Marafie even uncovered a secondary market of sorts, for hijacked domain names. For the domains they registered, Ultimate Media received offers from real cyber squatters. “What’s happening now is that the people who are registering the sites in order to try and get money from [project owners] in the end, are trading them with each other. Once we got [domains], people have been trying to buy them from us,” he said.

It seems that it is a detrimental habit of project owners and developers in the Middle East of generally not buying sites before releasing the names of their projects. For example, the $136 million property and entertainment venture Astrolab Resort planned for Dubailand, the Dubai mega project bigger in area than the Mediterranean nation of Monaco, does not own www.astrolabresort.com.

When Executive contacted the resort’s promoters, a firm succinctly named DotCom Real Estate, a secretary explained the company’s owners were on vacation but said the project did not have a website because “the project has not yet started. They’re still in the design phase and no project or marketing managers have been hired yet.”

That is all the more astonishing as Dubai is regarded as the region’s most advanced market in developing slick project websites.

“There is a big difference when you look at different countries,” Marafie said. “If you look at the whole Middle East, you see that Dubai is really the only (place) where they’ve realized” the importance of securing a “.com” domain.

The project site problem, it seems, results from a general indifference that businesses in the region show toward the internet. Companies may be somewhat aware that online presence is as much part of modern business practices as having a phone and fax, but websites are frequently of poor quality and contain “company news” with the most recent bulletin dated 2004 or 2005.

Research on the region in international comparison suggests that improvements in information age participation by countries of the region will need a lot more efforts than mailing a note to CEOs that they forgot registering a project domain. In annual rankings of information technology readiness of over 100 countries by the World Economic Forum, the Middle East has shown mixed performance in the past three years.

On the first list from 2004, the UAE, Bahrain, Jordan made the upper middle field with rankings of 23, 33, and 44, respectively. In the 2005 and 2006 rankings, however, the three countries dropped lower; the UAE slipped and was ranked 29th in the survey in 2006, Jordan fell to 57th place and Bahrain also dropped out of the top 50. On the upside, Kuwait temporarily climbed into the top 50 in 2005 but sled to 54 in 2006 and only Qatar proved a solid gainer — climbing to 36 in 2006. Such absence of internet savvy is a warning sign for problems beyond the danger of falling prey to extortionists which Ultimate Media’s research highlighted. As regional businesses strive to draw foreign investment and international customers, their quest will be exceedingly difficult if they neglect the medium that most

Dubai is building a new airport. Surrounded by sand and baking in the summer heat, workers are putting the final touches to the first runway of the Dubai World Central International Airport ahead of scheduled delivery in October. It is the first of six runways of what will be the world’s fourth-largest airport in terms of area, covering 140 square kilometers upon its completion scheduled for 2017 with a cost of an estimated $10 billion. The sprawling complex will boast the world’s largest passenger capacity — 120 million people per year.

Like everything else in Dubai, the airport will be connected to a hotel and a mall. The “fingers” that link planes to the concourse have been designed to accommodate the new Airbus A380 super jumbos that flagship carrier Emirates Airline is packing its fleet with in the coming years.

And if one World Central is not enough, Dubai’s government is progressing in the expansion of the existing airport, Dubai International. In total, the emirate is sinking $82 billion into the aviation sector to fund Dubai International Airport’s expansion, construction of Dubai World Central International Airport, and increasing Emirates Airline’s fleet.

Should Dubai continue to have the tourism drawing power it has displayed in the past five years, its new airport would be well positioned to surpass the world’s busiest airport, the Hartsfield-Jackson International Airport in the US city of Atlanta ranked number one worldwide in 2006 in terms of  handling the most passengers, with nearly 85 million.

This, however, is still a matter of expectation while Dubai’s existing airport has been inching its way up in the ranking of international air passenger traffic. On month-to-month basis, figures from the Geneva-based industry organization, Airports Council International, show that at the end of March 2007, the Dubai International Airport reached the number 10 spot in terms of international traffic. By the end of May, the airport rose to number nine with 2.6 million passengers.

Over the long haul

However, despite all efforts by US regulators to make it as displeasing as possible an experience, the domestic segment contributes hugely to total air traffic in the US and some other countries. This is the reason why Dubai airport, with its relatively small domestic travel, still does not make the world’s Top 30 list of total passenger traffic per airport, which is currently dominated by US airports.

But in regional and long-haul flights, Dubai’s aspirations to world leadership are not to be scoffed at. People routing through Dubai on its increasingly attractive connections from Middle Eastern and even European cities to Southeast Asia, the Far East, and Africa know that Dubai International is an overwhelming picture of construction. Its new terminal and two concourses will, at a cost of $4.1 billion, bring capacity up to almost 75 million passengers, on top of which the 120-million World Central will create an international air travel hub of unprecedented dimension.

The expansion of Dubai International was expected to be complete in 2006, but delays have pushed the date to 2009 confirmed a spokesman for the Dubai government’s Department of Civil Aviation (DCA).

As Dubai joins the exclusive club of cities, like Chicago, with two airports, the DCA spokesman brushed off issues of competition between the transport centers. “DIA and Dubai World Central are not competitors but sister concerns,” he wrote in an e-mailed response to questions from Executive. “They complement each other in catering to Dubai’s growing demand for tourism, travel and logistics.”

Plans call for the two airports to be linked by subway, in a bid to combat the suffocating congestion on Dubai’s streets. The government is also investing in a light rail system that will include stops at both airports.

One might wonder why a city that looks at a population horizon of four million in the next decade would need airports with capacity to serve nearly 195 million people per year (more than the population of Brazil, the world’s fifth most populous country). As the optimistic plans for Dubai’s development into a tourism theme park aim for 40 million visitors in 2015, it is clear that the airports will need to attract a huge portion of the world’s projected growth in long-haul flights.

For now, the emirate can bask in the knowledge that it outdid its own plans in the past. Sheikh Mohammed’s 10-year strategic plan announced in 2000 was realized in half the time. “In 2000, the plan was to increase GDP to $30 billion by 2010. This figure was exceeded in 2005, with GDP reaching $37 billion,” he said, addressing an audience in February as he announced the new plan for 2015.

Is hospitality losing to construction?

One will have to see if the emirate that could exceed its targeted per capita income by 35% five years ahead of schedule will be able to replicate such performance feats in its extreme growth vision for its future role in aviation.

An entirely different question is if the passengers of the next decade will consider the airport with the biggest crowd to be the most desirable hub for their travel. Dubai International, with its construction issues in the past two years, did not quite make it in terms of getting full points for service. In the most recent airport rankings, it landed the best airport in the region honor but did not appear among the global top ten.

Once the expansion of Dubai International is complete (and the local traffic infrastructure has had those bypass operations), the emirate and the companies in charge of running its airports will have a chance to put proof to the belief that Dubai has a golden touch for management of traveling multitudes with the value-added local heart of hospitality.

Dubai World to Buy $5 Billion Stake in US-based MGM Mirage

Although, officially, the UAE has a ban on gambling, the government-owned Dubai World, announced in late August that it would invest as much as $5 billion in Kirk Kerkorian’s MGM Mirage, the world’s second largest casino company.

Dubai World said that it will buy a 9.5% stake or 28.4 million MGM shares for around $2.4 billion with an option to increase its stake to 20%. It will also spend $2.7 billion on a 50% stake in CityCenter — a large hotel and casino complex MGM is planning for Las Vegas’s Strip.

“Dubai World’s proficiency in real estate, combined with our company’s operational expertise, strong brands and world-renowned resorts, creates competitive advantages that we believe will benefit all of our stakeholders,” MGM chief executive Terry Lanni told reporters.

The UAE in particular, and the GCC in general, is flush with cash from oil revenues and Dubai has already announced that it will invest over $14 billion in acquisitions in 2007 and analysts say half of these acquisitions will be in foreign companies abroad.

Analysts in Dubai believe Dubai World has paid too much for the stake in MGM and Kerkorian has landed a deep-pocketed partner willing to both pay a premium price for a big stake in the company and invest in its biggest project.

Dubai World has agreed to pay MGM an additional $100 million if CityCenter opens on budget and on time by the end of 2009. The construction cost of the CityCenter project, a  76-acre Las Vegas development of hotels, condos and retail outlets is $7.4 billion.

Dubai World runs businesses for the Gulf state including a palm tree-shaped island off the emirate’s coast, container-port operator DP World and private equity firm Istithmar.

MGM Mirage is a dominant player in Las Vegas, where it owns a third or more of the Las Vegas Strip and about half the hotel rooms.

For some observers, a much awaited trend is beginning to take shape in the Middle East: that of Arab countries ditching their pegs to the American greenback in favor of adopting pegs to the euro — the currency of 13 of the European Union’s 27 current members — or a basket of mixed currencies. A move that would be much hailed by the local citizenry in the region as overdue; but not so warmly welcomed by regulators in the US entrusted with maintaining the US dollar hegemony.

Managing exchange rate regimes and mitigating risks of global repercussions from currency volatilities may well be the economist’s version of Michelangelo’s challenge to paint a perfect picture on the ceiling to the Sistine Chapel. That’s why central bankers reside in the top levels of the worldwide financial decision making mechanism. Between the various options of using a gold standard, applying limited currency management, trusting all-out in the market with a floating exchange rate, or going the opposite way of fixed exchange rates, central banks in emerging markets usually have to select the least undesirable from a list of evils, on top of which they may be subjected to political interference.

The case for abandoning the dollar peg in the Gulf has been made repeatedly in the past, as the international financial markets have shown a tendency to migrate toward currency floats of varying openness and the International Monetary Fund has supported discussions of countries allowing greater exchange rate flexibility. The issue has become intensely pressing for the countries of the Gulf Cooperaion Countries (GCC) this year, as their enormous current account surpluses from dollar-denominated oil exports coincided with a weakening of the greenback. 

Moving away from the dollar

The dollar has lost value against a host of foreign currencies like the euro (-11%) and the Australian dollar (-8%) in 2006. The prospect of a prolonged sliding dollar makes central bankers in the MENA region anxious since they sit on a large amount of greenbacks. And a weakening dollar has also caused rampant inflation across the region forcing many in and outside the official circles to question the continued peg of the GCC’s national currencies to the dollar, despite the project of creating a joint GCC currency by 2010 for which the dollar peg was considered important.

Regional examples for a move away from a strict dollar peg prominently include Egypt, whose 2003 decision to attempt using a floating exchange rate regime has been used as a case study by the IMF. Syria toyed with announcements of changing its unofficial dollar peg for about two years, with political overtones because of US sanctions against the country. 

But the first member of the GCC to break ranks and ditch the US dollar is Kuwait. Known for being a prominent US ally in the region, Kuwait made global headlines in late May when it announced that it has de-linked its dinar from the dollar and opted for a basket of currencies instead. Its central bank did not disclose the weighing of the currencies in the basket but analysts concluded from recent movements of the dinar that the dollar still accounts for the lion’s share in the basket.

Syria formally announced only in mid-August that it will peg the Syrian pound from now on to the IMF’s special drawing rights (SDR), instead of the dollar. And now, observers, and currency traders see signs that the United Arab Emirates (UAE) — the region’s most vibrant economy — might be heading down the same path saying that currency traders are betting on this development as Forwards Market Contracts show what the market is betting on.

Forwards are agreements where dealers agree to deliver currency, commodities, or financial instruments at a fixed price at a specified future date. Trading in the contracts allows investors to bet on the value of a currency that isn’t fully convertible or hedge investments denominated in it.

“If the next few months confirm further questioning of the monetary union project, the UAE and Qatar will be the next candidates for revaluations, be it straight ones or through a peg to basket of currencies,” Koceila Maames, Middle East economist at French bank Calyon, said in a research report. As the GCC countries throughout have to be concerned with calming their overheated economies, analysts recently also have spoken of signs that the region’s economic powerhouse, Saudi Arabia, is considering de-linking its riyal from the dollar.

A weak dollar against other international currencies was the main driver behind the rise of costs of imports which are denominated in the euro for most GCC states. This, economists say, has started the wheels of inflation rolling full speed ahead at a time when GCC countries do not have the ability to raise interest rates out of step with the US Federal Reserve. UAE’s inflation rate was reported to be around 9% in 2006 by the government, but international agencies say it is around 10.1%. Inflation in Kuwait hit 5% in the first quarter of 2007, up from 3.9% in December 2006. Inflation in Saudi Arabia rose to a five-month high of 3.1% in June this year as food and housing costs climbed, official data showed.

Some consumers in the Middle East appear to believe that the dollar is the world’s currency and have a superficial perception that a numerical exchange rate of better than one to the dollar for a local currency is indicative of its strength whereas currencies would be weak if a dollar buys several dirham, dinar, or pound.

But beyond such misperceived appearances, it is undisputed that governments in the region had to align their monetary policies to those of the United States because of the pegs of their national currencies to the greenback.

This move meant that when the US raises or reduces interest rates or when it increases its money supply, countries whose currencies tied to the dollar would have to follow suit. This, observers said, forced regional governments to set their interest rates along the lines of US policies, making them too low for their much faster growing economies. This led to unhealthily spiraling credit expansion and caused inflation. 

On the international level, the dollar made up 64.7% of global currency reserves in the fourth quarter of 2006, down from 65.8% in the prior three months. The euro’s share was 25.8%, the highest since its 1999 debut, an IMF report showed.

The pegging dilemma

Part of the dollar dilemma for the GCC is that only around 10% of Gulf imports are from the US while Asia accounts for more than 40% of imports into the region, Eckart Woertz, an economist at the Gulf Research Center in Dubai, said. He added that the peg “erodes the asset values of GCC countries which hold a majority of their investments in dollars, increases import bill, and erodes the purchasing power of wage earners, especially of expatriates.’’

Another matter of concerns for the GCC is budget surpluses from high oil prices, fueling multibillion-dollar infrastructure projects and the resultant economic growth across the region had caused property prices to go out the roof in countries like the UAE and Qatar. Unchecked inflation, lack of preparation for fast economic growth combined with high unemployment rate in the GCC makes the issue even more complicated. Analysts say that as long as monetary policy is tied to a weakening dollar, the situation will only worsen.

Inflating the UAE

The United Arab Emirates, the second-largest Arab economy after Saudi Arabia, had an inflation rate of 10.1% in 2006 compared to 7.8% in 2005. Although they won’t admit publicly, UAE government officials are very much concerned about the weakening dollar and as a  result of the inflation — mainly caused by the peg of the dirham to the dollar and a jump in the price of housing — the government has introduced new laws to curb it.

“The Ministry of Economy is working hard to curb inflation through a number of steps including a recently drafted competition law, which is awaiting the final approval from the Ministry of Justice,” Sheikha Lubna al-Qasimi, the UAE’s minister of economy, said in a government report. “Prices of housing units and services increased 15.3% according to each Emirates economic growth and real estates’ map,” the report added.

But the hike in real estate prices is not the biggest factor when the reconsidering a monetary policy. One problem with the situation is that the governments seem very reluctant to speak openly about the challenges they face on the exchange rate front. Officially, the UAE line on this issue is that there is no serious consideration to change the peg. But a top Lebanese analyst told Executive that if one wanted to know what a government is going to do with its currency, “listen to what they say they aren’t going to do … then expect the opposite.”

The UAE’s Central Bank governor, Sultan Nasser al-Suweidi told reporters in Switzerland, while speaking on the sidelines of the annual meeting of the Bank for International Settlements, that the UAE will not rule out the option. “No, we are not ruling it out, but we will have to move together,” he added. ‘Together’ means the rest of the GCC countries. And to further support this premise, earlier this year, the UAE’s Central Bank acted on a planned move to convert 8% of its $25 billion dollar-denominated foreign-exchange reserves to euros.

Analysts take these remarks and steps as an indication that the country might be heading down the same path as Kuwait. Observers point out that certain measures and trends such as the Forwards Contracts show that the UAE might be the next GCC country to say goodbye to the dollar in favor of a basket of currencies. If this happens, it would not be long before the remaining countries like Saudi Arabia fall in line.

Saudi Arabia’s turn

Off the record, a number of Saudi politicians have started to question the wisdom of the kingdom’s policy of tying the riyal to the dollar. A main reason behind these doubts is that a weak dollar creates havoc in the economy through inflation and restricts the country’s monetary policy. In June, a top Saudi financial analyst said that he was baffled why Saudi Arabia in particular and the GCC states in general continue to peg their currencies to the weakening US dollar.

“The question is what are the real reasons for continuing the same policies for long periods of time without any changes or amendments?” Mohammad Bin Abdullah al-Suwayed asked. “Pegging the Saudi riyal to the dollar is not a sacred matter that cannot be changed. It is a legacy of previous eras when the government was the sponsor and supervisor of the country’s economic development, which was financed from oil revenues generated in dollars,” he opined.

Inflation has been on the rise as profits from oil revenues continue to spur economic growth, increasing demands for goods and real estate. Al-Suwayed said the biggest problem with the kingdom’s monetary policy is the continuation of government control in economic development. He proposed increasing the participation of the private sector in this regard.

Wait! Jordan too

Calls by your average Joe and politicians to end the archaic policy of pegging the national currency to the dollar are not restricted to the GCC countries. As mentioned, Syria has already taken the step and now Jordanian politicians are calling for the same.

“Jordan should follow Kuwait’s steps in linking the dinar to a basket of currencies, because the drastic decline in the dollar’s value is having negative repercussions on the Jordanian economy,” Jaafer Hourani, a member of Jordan’s parliament said in a recent public statement, arguing that Jordan, like other countries in the region, experiences inflationary pressures and an erosion of purchasing power because of the peg.

The Jordanian dinar has been pegged to the greenback for over 12 years and official policy by the country’s Central Bank is to uphold the ties between the dinar and the dollar as this policy has provided Jordan the stability it needs when conducting commercial activities outside the region. But Hourani believes that the motivation behind the continuation of the dinar-dollar link is motivated by “political reasons” and not economic ones.

The bottom line

There is a consensus across the board in the region: the dollar peg is not helping to curb inflation and is restricting the development of solid monetary policies. Furthermore, a dollar peg does not provide the flexibility small countries need in a global economy. Local experts agree that all the GCC currencies are undervalued by at least 25%. And should the trend of declining dollar continue — and most observers believe it will, due to solid economic performance by the euro zone and higher inflation in the United Kingdom — the GCC will continue to suffer the consequences.

But the economic effect of the dollar peg is only one component of the equation. The second and more prominent in people’s mind and even in the official circles is the political one. Observers agree that the MENA region as a whole has been under public pressure to dissociate from the United States due to its biased Middle East policies — both on the political and economic front. On the official level, many leaders and businessmen were appalled by the United States decision to block Dubai Ports World from buying five American ports in a multi-billion dollar deal in March of 2006. The move clarified to the Arabs that Arabophobia is rampant in the United States government or at least in the circles of neo-conservatives and certain minority groups. Gulf countries are the West’s most steadfast Middle Eastern allies, yet they are treated like second-class citizens.

Another aspect of the debate is the six-country GCC plan for a single currency by 2010. This is now in doubt after Oman said it would not be able to meet all the requirements by the target date and Kuwait’s move to delink its dinar from the dollar. But this can be addressed: if GCC bankers can agree on a basket composition then perhaps a total rejection of the dollar peg is forthcoming, and as such, plans for a single currency will not be totally abandoned.

If this happens it would only be part of a global trend of keeping the dollar at bay. The world has advanced a great deal since the dollar was the single leading currency in the days from World War II up to 1971.

Rotana merges with LBCSat for a stronger position in the pan-Arab TV market

Rotana satellite television, owned by Saudi Prince Al-Waleed bin Talal announced in August that it is merging with the Lebanese Broadcasting Corporation Satellite (LBCSat), in an effort to achieve a stronger position in the pan-Arab TV market.

“LBCSat channel and Rotana channels will be integrated under one management, but they will remain administratively and financially independent,” a person in LBC close to the matter told Executive.

He added that both channels are not planning to merge under one entity at this stage, but the person, who preferred to remain anonymous, said that Pierre El-Daher, LBC chairman and CEO, will continue to be the chief executive officer of LBC channels and under the agreement, El-Daher will oversee the Rotana channels which include Rotana Clip, Rotana Music, Rotana Khaleejah, Rotana Tarab, Rotana Cinema and Rotana Zaman as well as the LBCSat channel.

When contacted by Executive, LBCSat declined to provide further details about the merger, saying that the plan is still not clear and that they will issue a statement once they have new developments to disclose. According to LBCSat, the reason behind the merger is to achieve a stronger position in the pan-Arab TV market by building a platform of complementary channels offering the best TV content to Arab audiences.

In 2003, Prince Al-Waleed bought a 49% stake in LBCSat at a cost of around $98 million. Al-Wadeed said that the partnership between LBCSat and Rotana marks an important moment in the cultural and social development of the Middle East. “Pierre and I share the same vision and the drive to elevate the Arab world in the global community,” he said. “A vibrant media scene is an important part of this goal and so our deal with LBCSat is a step in the right direction.”

Asked whether they’re planning to list shares on bourses in Lebanon or the Gulf, the person from LBCSat said that in the long-run, when both companies are merged into one, an initial public offering is definitely going to be one of the options; however, “it is premature to speak now of any IPO details.” Earlier, El-Daher told pan-Arab daily Asharq Al-Awsat that the aim behind the merger is to list the TV station on the bourse, a process which requires procedure and time. But according to media reports LBCSat will probably be listed on the Dubai Financial Market or the DIFX, but not on the Saudi stock exchange.