Etisalat deadline for Zain deal set for end of January

Reuters, Thursday 20 Jan 2011

Though it missed its due diligence deadline on the deal, Zain shareholder Kharafi says company is close to reaching an agreement

Emirates telecommunications company Etisalat will complete its due diligence on a deal to purchase a stake in Kuwaiti telecommunications group Zain by the end of the month.

After missing its 15 January deadline to complete its due diligence on the deal, the company is close to reaching an agreement with shareholders but does not yet have their full support, Nasser al Kharafi, chairman of Zain shareholder Kharafi Group, said in an interview with The National on Thursday.

Etisalat said on Sunday it had not made sufficient progress toward finalising the deal by the deadline due to "unforeseen delays" in Zain providing access to relevant information.

Etisalat made an offer to buy a 46 per cent stake in Zain for 1.7 dinars a share last September. A unit of the conglomerate is working on behalf of its parent firm to gather Zain shares to tender to the offer.

The deal has been dogged by hurdles including a lawsuit attempting to block the stake sale as well as an unexpected bid by Turkey's Cukurova Holding to buy 29.9 per cent of Zain for $7.89 billion.

Kharafi told The National that the conglomerate would not support the competing bid, calling it an attempt to "sabotage" Etisalat's efforts to buy the controlling stake in Zain.

Short link: