Etisalat faces fight for Zain
One of the Middle East’s largest merger and acquisition deals could be scuppered by court action, after minor Zain shareholders vowed to block Etisalat’s proposed $12 billion (€8.9 billion) buy-out.
Fawares Holding, which owns around 4.5% of the Kuwaiti operator, has asked a local court to put the stoppers on Zain opening its books to rival Etisalat, while the firm’s representative on the Zain board has filed a lawsuit in to block the sale of its Saudi Arabian subsidiary – a condition of the deal with Etisalat -, FT.com reports.
Zain shareholders represented by Securities Group are also against opening the cellco’s books for scrutiny under due diligence procedures and oppose the sale, the investment firm’s chairman Ali Mousa told the news site.
The shareholders are estimated to hold up to 15% of Zain through indirect stakes.
Etisalat offered 1.7 Kuwaiti dinars (€4.50) per share for a 46% stake in Zain in September – enough to give it control of the operator when combined with a current 10% treasury holding.
The sale is being pushed forward by Zain’s largest shareholder the Kharafi Group, which reportedly agreed a deal with a consortium led by Indian property group Vavasi last year.
Controversy surrounding that attempt led to Zain CEO Saad Al Barrak resigning in February shortly before the carrier agreed the sale of its African holdings to Bharti Airtel for $10.7 billion.