Zain Can Open Books to Etisalat
A Kuwaiti court ruled on Wednesday that Kuwait-based Zain telecom can open its books for due diligence to the Emirati firm Etisalat which has offered to buy a majority stake in Zain.
Al-Fawares Holding, a leading private investor in Zain, had filed a lawsuit against opening the books, on the grounds that it had not seen an official purchase offer from Etisalat.
Al-Fawares, believed to own about five percent in Zain, also demanded that the Kuwaiti company should not be allowed to sell off its Saudi unit, a precondition for the Etisalat deal.
"The case was dismissed," said a court clerk, reading from the verdict, although the verdict can still be challenged before Kuwait's appeals and supreme courts.
In September, Etisalat said it had submitted an offer to the Khorafi Group, the largest private investor in Zain, to buy a majority stake for about 12 billion dollars.
Khorafi Group has a direct stake of 12.7 percent in Zain and an estimated indirect stake of at least seven percent.
Etisalat, the Gulf's biggest telecoms provider by market value, said last month it had signed a preliminary accord with Khorafi to buy 51 percent of Zain shares traded on the Kuwait Stock Exchange at 1.7 dinars (6.1 dollars) per share.
Conditions it listed include the completion of satisfactory due diligence, obtaining all applicable regulatory approvals and no material adverse change in Zain's business or financial and regulatory affairs.
Due diligence and the other work required to reach definitive agreements would take a number of weeks, while the transaction is unlikely to close before the end of the first quarter of 2011, Etisalat said.
Etisalat has already started the due diligence process about a month ago and Kuwaiti media reported on Wednesday that the United Arab Emirates company was close to completing the process.
In a statement on November 3, Etisalat said its purchase proposal would terminate unless the parties have entered into "definitive transaction documents" by January 15.
If concluded, the deal will be the region's largest telecom transaction.