Kharafi gets backing for $12bn Etisalat deal
Kuwait, October 7, 2010
Kharafi Group has received the backing of enough Zain shareholders to sell 46 per cent of the Kuwaiti telecommunications group to Etisalat, clearing at least one hurdle in sealing the $12 billion deal.
Emirates Telecommunications, or Etisalat, bid KD1.7 ($6.02) per share for the stake in Zain, the Gulf's third largest telecommunications firm, last week and quickly won Kharafi Group support.
Kharafi Group, a family conglomerate, owns a 12.7 per cent stake in Zain, but analysts estimate Kharafi's stake to be around 20 per cent through other firms it controls.
The group asked National Investments Company (NIC), which it owns, to secure the rest of the shareholder support required for the deal.
'We have approvals from our clients to join the consortium and these approvals have taken us to the 46 percent,' Hamad al-Ameeri, general manager of NIC told Reuters.
The Kuwait Investment Authority, the country's sovereign wealth fund, owns a 24.6-per cent stake in Zain but is widely believed to want to hold on to its position.
NIC's Ameeri said 'things are going better than we expected,' but that it was too early to set a closing date for the deal.
Naser al-Nafisi, general manager of Al-Joman Center for Economic Consultancy, said it was not surprising that shareholders joined the consortium, given the 'attractive' price offered for the shares.
Zain shares closed up 1.49 per cent at 1.36 dinars. Etisalat shares were flat at Dh10.70 ($2.91) and NIC shares closed up 5.26 per cent at 0.5 dinars. 'It was expected. If they want 60 percent they can get it,' Nafisi said.
Last week, Etisalat said its offer was preliminary and conditional. It did not outline what conditions needed to be met. Etisalat officials were not immediately available for comment.
A Zain spokesman said: 'No comment on shareholders' issues, and as far as the management is concerned, business is as usual.'-Reuters