(Adds Vodafone was the seller)
By Matt Smith
DUBAI, May 7 (Reuters) - Zain has bought a 6.25percent stake in its Bahraini subsidiary from Vodafone for $12.5 million, upping the Kuwaiti firm's stake to 63 percentwhich will allow it to retain majority control after the unit'sstock market listing.
The acquisition values Zain Bahrain, which must sell 15percent of its shares in an initial public offering (IPO) andlist on Bahrain's bourse as stipulated by its licence terms, at$200 million.
Zain said in a statement on Wednesday that it had bought thestake from "other shareholders" without elaborating, butVodafone separately told Reuters it had sold its entire 6.25percent stake in Zain Bahrain.
Zain did not explain why it had done the deal, but inDecember Chief Executive Scott Gegenheimer said his companywanted 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 theKuwaiti firm's stake to drop below 50 percent. Upping itsholding to 63 percent ahead of the IPO has removed that danger.
In February, an industry source told Reuters that ZainBahrain aimed to launch the share sale by the end of June.
Gulf countries often stipulate in telecom licences thatoperators list on the local stock market to help diversify thebourse. (Reporting by Matt Smith; Editing by Pravin Char and WilliamHardy)