Etisalat seeking lower stake in Zain of 40pc
Kuwait, December 16, 2010
Etisalat lowered the stake it is seeking in Kuwaiti telecoms carrier Zain to 40 per cent, two sources familiar with talks said on Thursday, after a consortium deal to buy 46 per cent of Zain met opposition from other shareholders.
UAE operator Etisalat, seeking access to high growth Middle East and African markets including Iraq and Sudan, had wanted to buy 46 per cent of Zain for $12 billion from a consortium led by Kuwaiti construction and investment company Kharafi Group.
But shareholders outside of the consortium and a Zain board member opposed the premium the Kharafi Group would earn from the deal, moved to block it, potentially delaying the deal.
One shareholder, Al Fawares Holding - which owns a 4.5 per cent stake in Zain - took legal action to halt the due diligence in the planned sale and a ruling had been scheduled for next week, on December 22.
Etisalat's original offer, when included with treasury shares owned by Zain, would have given the UAE carrier a controlling 51 per cent stake.
Another source close to the deal said the new purchase threshold would effectively mean the deal would go forward with Etisalat becoming a major Zain shareholder instead.
Legal action had threatened to delay the transaction, or potentially scupper it. Etisalat has said any deal could fail if definitive documents are not signed by January 15, 2011.-Reuters